DELAWARE                                                                     
36-0700810

2200 Kensington Court, Oak Brook, IL                                 
60523

Not Applicable(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed
by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to file such reports), and (2) has 
 been subject to such filing requirements for the past 90 days.   YES [x]  NO []
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as 
 of the close of the latest practicable date.Class                       
Outstanding at November 5, 2002
Class A Voting Stock - $1,000 par value                                            
3,620 shares
Class B                        
$1,000 par value                                            
1,976 shares
Class C                        
$   100 par value                                     
2,719,613 shares

ACE HARDWARE CORPORATION
INDEX

Part I. - Financial Information                                                                                                  
Page No.
            Item 1.   Condensed Consolidated Financial Statements       
                       
Condensed Consolidated Balance Sheets - 
                               
September 28, 2002 and December 29, 2001                                              
1
                       
Condensed Consolidated Statements of Earnings and 
                               
Condensed Consolidated Statements of Comprehensive
                               
Income - Thirteen Weeks Ended and Thirty-nine Weeks Ended
                               
September 28, 2002 and September 29, 2001                                             
2
                       
Condensed Consolidated Statements of Cash Flows - 
                               
Thirty-nine Weeks Ended September 28, 2002
                               
and September 29, 2001                                                                             
3
                       
Notes to Consolidated Financial Statements                                                      
4 - 6
                       
Item 2.   Management's Discussion and Analysis of Financial
                                   
Condition and Results of Operations                                                     
7 - 9
                       
Item 3.   Quantitative and Qualitative Disclosures About
                                   
Market Risk                                                                                           
9
                       
Item 4.   Controls and Procedures                                                                        
9
Part II. - Other Information
                       
Item 6.   Exhibits and Reports on Form 8-K                                                       
10

PART I.  FINANCIAL
INFORMATION 
ACE HARDWARE CORPORATION 
CONDENSED CONSOLIDATED BALANCE SHEETS 
(000's omitted)

September 28,
              
   
December 29,
                                                                   
     2002                    2001
                                                                        
 
(Unaudited)                                         
ASSETS
Current Assets
      Cash and cash equivalents
                           
$         24,178
                  
$       25,213  
      Short-term investments
                                           
16,489
                            17,158 
      Accounts receivable,
net                                         316,049               
           369,035 
      Merchandise inventory                                           
401,517                          
412,568 
      Prepaid expenses and other current assets      16,684                    16,295        
Total current assets                                         
774,917                          
840,269 
Property and equipment, net                                         
287,255                         
287,507 
Other assets                                                         45,259                    41,015 
                                                                           
$    1,107,431                  
$  1,168,791             LIABILITIES AND MEMBER DEALERS' EQUITY 
Current Liabilities 
      Current installment of long-term debt              
$          
6,162                  
$        7,179 
      Short-term borrowings                                              
41,900                          
72,600 
      Accounts payable                                                    
370,430                        
409,789 
      Patronage dividends payable in cash                           
32,192                          
34,229 
      Patronage refund certificates payable                          
13,165                            
9,084 
      Accrued expenses                                            81,847                   81,062 
             Total current liabilities                                        
545,696                        
613,943 
Long-term debt                                                              
165,020                        
170,387 
Patronage refund certificates payable                                
81,097                          
77,401 
Other long-term
liabilities                                        29,084                   27,184    
Total liabilities                                                            
820,897                    
   
888,915

Member dealers' equity 
      Class A Stock of $1,000 par
value                               
3,815                          
3,693 
      Class B Stock of $1,000 par value                               
6,499                          
6,499 
      Class C Stock of $100 par value                              
284,445                      
260,224 
      Class C Stock of $100 par value, issuable to dealers 
           for patronage dividends                                         
21,893                        
23,284 
      Additional stock subscribed, net                                      
263                             
303 
      Retained deficit                                                         
(23,837)                      
(17,591)
      Contributed capital                                                     
13,485                        
13,485 
      Accumulated other comprehensive income          (789)                (1,239)
                                                                                      
305,774                       
288,658 
Less: Treasury Stock, at cost                                           
(19,240)                        
(8,782)
           Total member dealers' equity                         286,534                 279,876
Total liabilities and member dealers'
equity               
$   1,107,431                
$   1,168,791

See accompanying notes to condensed
consolidated financial statements.





ACE HARDWARE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(000's omitted)
(Unaudited)

Thirteen Weeks
Ended              
Thirty-nine Weeks Ended
                                        
September 28,   September 29,    September 28,   September
29,
                                         2002                 
2001                 
2002                 
2001

Net sales
                          
$       749,811 
$       722,981     $  
2,298,131     $   2,204,095 
Cost of sales
                      669,146   648,918    2,074,861     1,993,509
Gross profit
                                 
80,665            74,063
             223,270
            
210,586 
Operating expenses: 
Distribution operations
                 
14,132            15,771
              
42,242
              
48,441 
Selling, general and administrative   15,209
           14,897
              
47,015
             
48,034 
Retail success and development    16,007     17,510       51,108      55,574
Total operating expenses       45,348   48,178      140,365     152,049
Operating income
                        
35,317            25,885
               
82,905
             
58,537 
Interest expense
                           
(5,347)            (5,715)
            
(16,909)            (17,311)
Other income, net
                          
2,710
             
3,096
                
7,562             
10,629 
Income taxes
                       (638)   (412)    252    (1,790)Net earnings
                      
$        32,042  $       
22,854     $        
73,810   $       
50,065
Distribution of Net Earnings 
  Patronage dividends
                  
32,035             23,715
               
80,056             
56,574 
  Retained earnings
              7   (861)       (6,246)     (6,509) 
Net earnings
                      
$        32,042  $       
22,854       $      
73,810    $      
50,065

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(000's omitted)
(Unaudited)

Thirteen Weeks
Ended             
Thirty-nine Weeks Ended
                                          
September 28,   September 29,    September 28,   September
29,
                                          2002                   
2001                   
2002                 
2001
Net earnings
                      
$         32,042  
$         22,854    
$        73,810    
$        50,065 
Unrealized gains on securities
             
436
                 
133
                  
345
                    
53 
Foreign currency translation, net  (432)   (769)     105      (1,125)
Comprehensive income        $        
32,046   $         22,218
    $        74,260   
$        48,993

See accompanying notes to condensed
consolidated financial statements.





ACE HARDWARE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(000's omitted)
(Unaudited)

Thirty-nine Weeks Ended
                                                                                       
September 28,           September
29,
                                                                                        2002          2001
Operating Activities 
   Net earnings
                                                                
$          73,810
        
$          50,065     Adjustments
to reconcile net earnings 
   to net cash provided by operating activities: 
        Depreciation and amortization
                                             
23,983
                    
21,240 
        Gain on sale of property and
equipment, 
            net of
deferred taxes of $1,587
                                            
-  
                       
(3,079)
        Decrease in accounts receivable, net
                                    
52,986
                   
43,636 
        Decrease (increase) in inventories
                                        
11,051
                  
(61,195)
        Increase in prepaid expenses and 
            other current
assets
                                                             
(500)
                   
(2,849)
        Decrease in accounts payable and 
            accrued
expenses
                                                           
(38,574)
                   
(2,978)
        Increase in other long-term
liabilities
                            1,900           2,847 
     Net Cash Provided by Operating Activities
                            
124,656
                    
47,687
Investing Activities: 
        Proceeds from sale of (purchase of)
short-term 
            investments
                                                                         
669
                          
(88)
        Purchase of property and equipment
                                 
(23,620)
                   
(48,838)
        Increase in other assets
                                               (3,794)             (2,205)     Net Cash
Used in Investing Activities
                                    
(26,745)
                  
(51,131)
Financing Activities: 
        Payments of short-term borrowings
                                      
(30,700)
                  
(3,000)
        Proceeds from issuance of long-term
debt
                               
  -  
                      
70,000
        Principal payments on long-term debt
                                     
(6,384)
                  
(2,840)
        Payments of patronage refund
certificates 
            and patronage
financing deductions
                                   
(18,194)
               
(13,633)
        Proceeds from sale of common stock
                                       
1,019
                   
1,161 
        Repurchase of common stock
                                               
(10,458)
               
(12,498)
        Payments of cash portion of patronage
dividend           (34,229)          (34,764) 
Net Cash Provided by (Used in) Financing Activities
                     
(98,946)
                  
4,426 
Increase (decrease) in Cash and Cash Equivalents
                           
(1,035)
                     
982 
Cash and Cash Equivalents at beginning of period
             25,213          24,644
Cash and Cash Equivalents at end of period
                     
$            24,178         
$       25,626

See accompanying notes condensed
consolidated financial statements.











1)      General
                   
The condensed consolidated interim period financial statements presented herein do not
                   
include all of the information and disclosures required in annual financial statements 
                   
and have not been audited, as permitted by the rules and regulations of the Securities 
                   
and Exchange Commission.  The condensed consolidated interim period financial 
                   
statements should be read in conjunction with the annual financial statements included
                   
in the Ace Hardware Corporation Annual Report on Form 10-K/A as filed with the 
                   
Securities and Exchange Commission on May 31, 2002. In the opinion of management, 
                   
these financial statements have been prepared in conformity with accounting principles 
                   
generally accepted in the United States and reflect all adjustments necessary for a fair
                   
presentation of the results of operations and cash flows for the interim periods ended
                   
September 28, 2002 and September 29, 2001, and of the Company's financial position
                   
as of September 28, 2002. All such adjustments are of a normal recurring nature. The
                   
results of operations for the thirteen week and thirty-nine week periods ended 
                   
September 28, 2002 and September 29, 2001 are not necessarily indicative of the 
                   
results of operations for a full year.

2)      Patronage Dividends

> The Company operates as a cooperative organization and will pay patronage dividends
>           to consenting member dealers based on the earnings derived from business done
> with
>           such dealers.  It has been the practice of the Company to distribute substantially all
>           patronage sourced earnings in the form of patronage dividends.
> 
> 
> Net earnings and patronage dividends will normally be similar since substantially all
>           patronage sourced net earnings are paid to consenting member dealers.  International
>           dealers signed under a Retail Merchant agreement are not eligible for patronage 
>           dividends and related earnings or losses are not included in patronage sourced earnings.

3)      Reclassifications

> Certain financial statement reclassifications have been made to prior year and prior
>             interim period amounts to conform to comparable classifications followed in 2002. 
>             During 2002, the Company reclassified as sales and cost of sales certain shipping and
>             handling costs that had previously been presented on a net basis within distribution
>             operations expenses and reclassified certain amounts within selling, general and
>             administrative expenses to distribution operations expenses.

4)      Segments

The Company is principally engaged as a wholesaler of hardware and related
                     
  products and manufactures paint products.  The Company identifies segments based
                     
  on management responsibility and the nature of the business activities of each 
                     
  component of the Company. The Company measures segment earnings as operating
                     
  earnings including an allocation for administrative expenses, interest expense and
                     
  income taxes. The net sales from external customers included in the other category 
                     
  are primarily generated from company-owned retail locations.  Information
                     
  regarding the identified segments and the related reconciliation to the consolidated
                     
  financial information is as follows:

Thirty-Nine Weeks Ended 
                                                              September 28, 2002 
                                                                                                                            
  Elimination 
                                                                                         
  Paint
                          
  Intersegment 
                                                             
  Wholesale      Manufacturing     
  Other      Activities      Consolidated
  Net Sales from External Customers       $2,245,168    $      
  15,455    $ 37,508  $          
  -        $2,298,131 
Intersegment Sales
                                       
  17,557             95,757               
  -     (113,314)                     
  -
Segment Earnings (Loss)
                              
  63,400            13,708       
  (3,065)          (233)
              73,810

Thirty-Nine Weeks Ended 
                                                              September 29, 2001 
                                                                                                                           
  Elimination 
                                                                                        
  Paint                        
  Intersegment 
                                                             
  Wholesale     Manufacturing     Other     
  Activities        Consolidated
Net Sales from External Customers       $2,149,826  
  $       13,921   $ 40,348 
  $           -       
    $2,204,095 
Intersegment Sales                                      
  19,850            89,628              
  -    (109,478)                        
  -
Segment Earnings (Loss)                             
  41,707            10,420      
  (1,822)         (240)             
  50,065

Thirteen Weeks Ended 
                                                              September 28, 2002 
                                                                                                                            
  Elimination 
                                                                                         
  Paint
                          
  Intersegment 
                                                             
  Wholesale      Manufacturing      Other 
      Activities      Consolidated
Net Sales from External Customers      
  $   732,970   
  $         3,345    $ 13,496 
  $           -       
  $   749,811 
Intersegment Sales                                        
  6,441             31,676               
  -      (38,117)                      
  -
Segment Earnings (Loss)                             
  26,838            
  4,770            467            
  (33)            
  32,042

Thirteen Weeks Ended 
                                                              September 29, 2001 
                                                                                                                           
  Elimination 
                                                                                        
  Paint                         Intersegment 
                                                             
  Wholesale     Manufacturing      Other      Activities      
  Consolidated
  Net Sales from External Customers       $  705,162   
  $         3,399    $ 14,420 
  $           -       
  $    722,981 
  Intersegment Sales                                       
  7,509             32,788               
  -     (40,297)                        
  -
  Segment Earnings (Loss)                            
  19,311              
  3,581             
  82         (120)              
  22,854

5)      Subsequent Event

> On October 22, 2002, the Company announced that it had entered into a letter of
>              intent to sell all of the issued and outstanding shares of Ace Hardware Canada 
>              Limited, a wholly-owned subsidiary.  Proceeds from the sale are expected to be
>              approximately US
>   $14 million, reflecting the value of inventory, trade receivables and
>              net tax operating losses.  Additionally, the Company will receive ongoing royalties
>              for the use of the Ace name. The transaction is expected to close in December 2002.
>              Based on the terms of the letter of intent, the Company expects to record a fiscal
>              2002 fourth quarter loss in discontinued operations in the range of
>   US $1.0 to US $5.0
>              million, net of tax, related to the operation and disposal of its interest in Ace Canada,
>              including all related shut-down costs, severance and contractual lease commitments.



ACE HARDWARE CORPORATION             
          PART I. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF              FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Consolidated sales increased 3.7%. Domestic sales increased 4.0% primarily due to 
        conversions of new stores to the Ace program and continued growth of same store
sales
        together with lower retailer cancellations partially offset by a decrease in sales
to non-coop
        members. International sales declined 2.6% primarily due to lower sales
to our existing
        customers.
        Gross profit increased $6.6 million and increased as a percent of total sales from 10.24% in
        2001 to 10.76% in 2002.  Excluding company-owned retail stores, gross
profit was 10.22%
        of sales in 2002. The increase as a percent of sales resulted primarily
from increased
        handling charges due to a shift toward handled sales, lower retailer
product returns and
        increased paint margin due to lower raw material costs.  
        Distribution operations expenses decreased $1.6 million from 2001 and decreased
as a
        percent of handled sales from 2.80% in 2001 to 2.38% in 2002 primarily due
to improved
        productivity, continued cost controls and the closure of a Canadian
distribution center.
        Selling, general and administrative expenses increased $312,000 over 2001; however, 
        decreased as a percent of total sales from 2.06% in 2001 to 2.03% in 2002 driven by a
        continued focus on cost controls together
with a reduction of expenses within the Canadian
        operations and lease savings due to the purchase of the corporate
office location.
        Retail success and development expenses decreased $1.5 million from 2001 primarily
due to
        continued cost control measures put in place in 2001 and the timing of retailer
and vendor
        advertising cost reimbursements. These expenses consist primarily of
field personnel and
        related costs, marketing, advertising, and training programs
for Ace retailers and expenses of
        company-owned retail operations.  Ace continues
to make investments in retail initiatives
        under its Vision 21 strategy to support Ace Retailers.
        Interest expense decreased $368,000 due to lower interest rates and lower average 
        borrowing levels under the revolving credit facility.
        Other income decreased $386,000 primarily due to a decline in retailer past due and low
        volume service charges and lower interest income.
        Income taxes increased $226,000 primarily due to increased income recognized on
non-
        patronage activities.

Thirty-nine Weeks Ended September 28, 2002 compared to Thirty-Nine Weeks Ended       
September 29, 2001       
Results of Operations
        Consolidated sales increased 4.3%. Domestic sales increased 4.5% while International sales
        were affected by lower sales in Canada. The increase in
domestic sales was primarily due to
        higher sales to our existing retailer base, lower retailer cancellations and sales to newly
        affiliated retailers.  This increase was partially offset by a decrease in sales to non-coop
        members.
        Gross profit increased $12.7 million and increased as a percent of total sales from 9.55% in
        2001 to 9.72% in 2002. The increase primarily resulted from higher handling charges due to
        a shift in sales mix towards handled sales, lower retailer product returns and freight costs
        and increased paint margin due to lower raw material costs partially offset by inventory
        adjustments.
        Distribution operations expenses decreased $6.2 million from 2001 and decreased as a
        percent of handled sales from 2.98% in 2001 to 2.45% in 2002 primarily due to improved
        productivity, continued cost controls, lower fixed costs as a result of the east coast 
        distribution center reconfiguration, the closure of a Canadian distribution center and 
        additional volume from logistics operations.
        Selling, general and administrative expenses decreased $1.0 million due to continued
cost
        control measures put in place in 2001, lease savings due to the purchase of the corporate
        office location and the closure of a Canadian distribution center. 
        Retail success and development expenses decreased $4.5 million from 2001 primarily
due to
        favorable timing of advertising cost reimbursements, continued cost control
measures put in
        place in 2001 and lower retail technology costs. These expenses
consist primarily of field
        personnel and related costs, marketing, advertising, and
training programs for Ace retailers
        and expenses of company-owned retail operations.  Ace continues to make investments in 
        retail initiatives under its Vision 21 strategy to support Ace Retailers.
Interest expense decreased $402,000 due to lower interest rates and lower average
        borrowing levels under the revolving credit facility.
        Other income decreased $3.1 million primarily due to 2001 non-recurring gains
recognized 
        on the sale of two distribution centers offset by a 2001 partial write-down of a
minority-
        owned investment of $3.0 million.  Other income was
also impacted by increased income
        from non-controlling investments of $1.4 million offset by a decline in retailer past due and
        low volume charges and lower interest income.
        Income taxes decreased $2.0 million primarily due to the taxes incurred on the sale of two
        retail support centers in 2001 and higher tax benefits from non-patronage activities in 2002. 
        Liquidity and Capital Resources


Ace's sources of cash necessary to operate its business ("liquidity") include internally
        generated funds, short-term lines of credit and long-term financing.




Cash flow generated from operations provides a significant source of liquidity.  Through
        the third quarter of 2002, cash provided by operations increased to
$124.7 million
        compared to $47.7 million in the same period of 2001.  The increase was primarily due to
        an increase in net earnings, improved receivable collections, and a reduction of inventory.




Cash used in investing activities through the third quarter of 2002 was $26.7 million
       compared to $51.1 million in the same period of the prior year.  The decrease was
       primarily due to decreased expenditures for the distribution network as 2001 included
       expenditures for the acquisition of Prince George, Virginia distribution center. Net capital 
       expenditures of $23.6 million in 2001 were financed out of current and accumulated
       internally generated funds and short-term borrowings.




Cash used in financing activities through the third quarter of 2002 was $98.9 million
       compared to $4.4 million provided in the comparable period last year.  In the second
       quarter of 2001, Ace obtained proceeds of $70 million from the issuance of Senior Notes.




Ace has an established, unsecured revolving credit facility with a group of banks. 
Ace has
       unsecured lines of credit of $185.0 million of which $143.1 million was available at 
       September 28, 2002.  Borrowing under these lines of credit bear interest
at a spread over
       LIBOR based upon quarterly debt to EBITDA ratios. Long-term
financing is arranged as 
       determined necessary to meet Ace's capital or other requirements, with principal amount, 
       timing and form dependent on prevailing debt markets and general economic conditions.
       The Company expects that existing and internally generated funds, along with new and
       established lines of credit and long-term financing, will continue to be
sufficient in the 
       foreseeable future to finance the Company's working capital requirements and patronage
       dividend and capital expenditure programs.

Item 3.      Quantitative and Qualitative Disclosures About Market
Risk

> There have been no material changes in the Company's market risk during the
>        thirty-nine week period ended September 28, 2002. For additional information,
>        refer to Item 7a in the Company's Annual Report on Form 10-K/A for the year
>        ended December 29, 2001.

Item 4.      Controls and Procedures

> Our Chief Executive Officer and Principal Financial Officer have concluded, based
>          on their evaluation within 90 days of the filing date of this report, that our
>          disclosure controls and procedures are effective for gathering, analyzing and
>          disclosing the information we are required to disclose in our reports filed under the
>          Securities Exchange Act of 1934.  There have been no significant changes in our 
>          internal controls or in other factors that could significantly affect these controls 
>          subsequent to the date of the previously mentioned evaluation.PART II. OTHER INFORMATION

Item 6.    Exhibits and Reports on Form 8-K

(a)      Exhibits

- Exhibit 99.1 Certification Pursuant to 18 U.S.C. Section 1350, as 
                      
    Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
- Exhibit 99.2 Certification Pursuant to 18 U.S.C. Section 1350, as 
                      
    Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
         (b)       A Form 8-K was filed on October 23, 2002 reporting under Item 5:

> A letter of intent entered into by Ace Hardware Corporation to sell all
>           issued and outstanding shares of its wholly-owned subsidiary Ace Hardware
>           Canada, Limited.



SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly 
 caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
                                                                              
ACE HARDWARE CORPORATION

Date: November 12, 2002                                        /s/ Rita D. Kahle                                                                                                   
Rita D. Kahle                                                                                           
Executive Vice President
                                                                                    (Principal Financial and Accounting
                                                                                           Officer, and duly authorized
                                                                                                Officer of the registrant)Certification of President and Chief Executive Officer

> 

Certification of Executive Vice President (Principal Financial and Accounting
Officer)

>