Nation’s Largest Auto Parts Retailer Stable in Sputtering Economy.

The media has done a fine job of convincing us that all things “automotive” will suffer if a big three bailout isn’t achieved. However, Memphis-based AutoZone Inc. has weathered the past three months of a sluggish economy pretty well. On Tuesday, AutoZone reported a slight drop in profits from a year ago during the first quarter of its fiscal year, despite an increase in sales.

For the three months ending November 22nd, AutoZone reported net income of $131.4 million compared with $132.5 million the same period the year before. Despite the slight drop in net income, AutoZone’s sales rose 1.6 percent to $1.48 billion.

Bill Rhodes, AutoZone’s chairman, president and chief executive officer, said the company’s long-term outlook is good. He highlighted two trends that work in AutoZone’s favor:

• A drop in gasoline prices this Fall added to driving, which, in turn, leads to a greater demand for car repairs.

• Also, with sales of new cars slumping, more people are keeping their cars longer and fixing them up.

With sales of new U.S. light vehicles falling to the worst levels in a quarter-century, some analysts say replacement parts purchases might increase over the long term as owners extend the life of existing cars, potentially driving AutoZone’s future sales and share price even higher.