The ratings on Canadian Tire Corp. Ltd. reflect the company's strong position as Canada's largest hard goods retailer, supported by extensive market coverage and strong branding. The ratings are further supported by what Standard&Poor's Ratings Services views as the company's resilient earnings amid challenging market conditions, in addition to its well-managed financial services operation that contributes significantly to operating income. These factors are partially offset, in our opinion, by fully adjusted leverage that is high for the ratings, particularly after giving effect to the cash- and debt-financed acquisition of Forzani Group Ltd. (now FGL Sports Ltd.), as well as competitive market conditions and uneven consumer activity in Canada. We believe that the acquisition of FGL has some modest
