* Q2 2011 EPS C$1.29 vs C$1.50 in Q2 2010
* Profit missed C$1.45 estimate, according to I/B/E/S
* Revenue up 4 pct to C$2.57 bln
* Spending on promotions, infrastructure holds back profit
* Shares down 1.6 pct in early trading on TSX
(Adds detail on previous acquisition, market reaction)
TORONTO, Aug 11 Canadian Tire Corp (CTC.TO)
(CTCa.TO) said on Thursday quarterly profit fell 14 percent as
it spent more on promotions and invested in infrastructure, and
the retailer's shares dropped.
Profit at the company, whose flagship Canadian Tire chain
sells housewares, sporting goods and automotive products,
dropped even as higher gasoline prices helped boost retail
sales by 5.1 percent.
Earnings fell to C$105.8 million, or C$1.29 a share, in the
fiscal second quarter ended July 2, from C$122.8 million, or
C$1.50, a year earlier.
Analysts, on average, had expected earnings of C$1.45 a
share, according to Thomson Reuters I/B/E/S.
Revenue, which includes financial services, rose 4 percent
to C$2.57 billion, compared with the average analyst estimate
of C$2.62 billion.
In addition to spending on its stores and merchandising,
lower-than-expected sales of some seasonal goods and costs
related to the company's Forzani acquisition held back profit,
said Chief Executive Officer Stephen Wetmore in a release.
The C$771 million purchase of Forzani Group Ltd FGL.TO,
the country's top sports retailer, cleared a review by the
Competition Bureau in early August. Canadian Tire said it
expects that transaction to close in the current quarter.
The Toronto-based company also owns Mark's Work Wearhouse,
a chain of casual and work clothing stores that it acquired
about a decade ago.
Since the acquisition, revenue and margins have improved
substantially at Mark's, and analysts have pointed to that as
an indication of what the retailer could achieve with Forzani.
Canadian Tire's more heavily traded Class A shares were
down 1.6 percent to C$54.68 in early trading on the Toronto
(Reporting by S. John Tilak and Allison Martell; Editing by