AutoZone Profit Up, Sales Slowing

However, the auto retailer also noted that inventory levels rose as sales began to falter and that higher occupancy costs cut into profits.

AutoZone posted a 3.6 percent rise in profit to $106.7 million, or $1.67 per share, from $103 million, or $1.45 per share, a year earlier. Revenue rose 3 percent to $1.34 billion in the three months ended Feb. 9 from $1.3 billion.

Analysts polled by Thomson Financial expected profit of $1.62 per share on revenue of $1.35 billion, on average.

Though earnings beat Wall Street expectations, AutoZone's inventory levels rose during the quarter as the company "experienced some decelerations in sales trends from the first fiscal quarter," Chief Executive Bill Rhodes said in a statement.

As of Feb. 9 AutoZone had 4,000 stores in the U.S. and 128 in Mexico.