TORONTO - Canadian Tire Corp. (TSX:CTC.A) executives said Thursday a combination of ugly summer weather and slack consumer spending, deflated sales in the second quarter, even though the company still pulled profits up 6.1 per cent.

Mike Arnett, president of the company's retail division, told analysts on Thursday that the combination "really weighed heavily on sales" during the period, an effect only worsened by the slower economy.

Arnett described a quarter scattered with potholes that covered the gamut, from rainy and cool conditions to a higher number of national holidays, which closed its stores.

However, the Toronto-based company, which sells a broad range of auto parts and services, tools, housewares, sporting goods, clothing and gasoline, said its earnings amounted to $103.7 million or $1.27 per share, up from $97.7 million or $1.20 in the prior-year period.

Retail sales fell 5.4 per cent to $2.79 billion from $2.95 billion a year ago.

Stripping out the impact of one-time items, Canadian Tire said it earned $103 million or $1.26 per share in the April-June period, up 8.8 per cent from $94.7 million or $1.16 per share.

Arnett noted more Canadians chose to fix items such as their lawmowers by replacing parts, instead of buying a new mower. The same thing went for their barbecues.

Those sorts of spending habits helped pull sales at its stores down by one per cent, while the timing of the Easter and Canada Day holidays bit into sales by about 0.6 per cent.

The story was somewhat different in Western Canada, though the "good amount" of sales growth wound up being offset by a slowdown in Ontario and Quebec, where the recession was especially prominent because of layoffs in the manufacturing sectors.

Sales at its gasoline pumps fell more than 20 per cent due to significantly lower retail gasoline prices, though volumes improved, while convenience store sales were "very strong."

In its Mark's Work Wearhouse division, pre-tax earnings amounted to $7.1 million, down from $7.3 million, helped by gross margin improvements. Total retail sales slid 9.8 per cent to $210.2 million as sales weakened across the entire country.

Canadian Tire's financial services division reported gross operating revenue of $232.9 million, an increase of 15.6 per cent from $201.5 million. Pre-tax earnings were down 4.7 per cent to $42.3 million.

The total managed portfolio of loans receiveable increased 4.7 per cent to $4.1 billion.

In his outlook for the year, chief executive Stephen Wetmore said he's not seeing any major upswing in Canadians' spending habits.

"Repair (and) maintenance categories are going to continue to be strong," he said.

"It's not yet clear how the Canadian consumer will behave as we head into the last half of the year. The weather can play a significant role in driving traffic and sales in the very important fourth quarter."

Research Capital analyst Robert Cavallo remained optimistic, saying that the second quarter's results exceeded his expectations, mostly because of better margins.

"They are getting some benefit from better product costs and better overall operating expense control throughout the entire organization," he said in an interview.

Cavallo added that while consumers are still going to spend cautiously, Canadian Tire has pulled through with relatively few bruises, and signs are pointing towards that trend continuing this year.

"Tire's put together three consecutive quarters in a very tough environment and they've shown they have the wherewith all to overcome it," he said.

"I think this is just another quarter that should give us confidence going forward."

Shares in the company closed ahead $2.61 to $58.49 on the Toronto Stock Exchange.