The company said net fuel margins per litre fell in a competitive market, which has also been hit by the implementation of a carbon tax in some regions.

Net income rose to C$203.8 million, or C$2.87 per share, in the second quarter ended June 30 from C$ 174.4 million, or C$2.38 per share, a year earlier.

Excluding items, it earned C$2.97 per share, missing the average analyst estimate of C$3.01, according to Refinitiv IBES.

The Toronto-based company's revenue of C$3.69 billion ($2.78 billion) also missed analysts' estimate of C$3.71 billion.

Canadian Tire has been spending to broaden its retail offerings by including private labels in addition to rolling out options like home delivery and aggressively pushing e-strategies as it looks to compete with global ecommerce giants like Amazon.com and Walmart Inc to win back market share.

Separately, Canadian Tire also said it agreed to buy Party City Holdco Inc Canadian business for C$174.4 million ($131.23 million), a deal that would immediately add to its earnings.

(Reporting by Arunima Kumar in Bengaluru; Editing by Anil D'Silva)