The ratings on Canadian Tire Corp. reflect the Toronto, Ont.-based company's leading position in Canadian hard-goods retailing, resilient earnings in the context of a very difficult economic and competitive environment, a credit card operation that contributes significantly to operating income, and a healthy liquidity position. These factors are offset by profitability that remains quite low for the ratings category, and operating margins that have remained relatively flat in the past few years. Despite the first half of fiscal 2003 being characterized by an unseasonably cold spring and two separate outbreaks of severe acute respiratory syndrome (SARS), Canadian Tire managed to grow half-year (to June 30) total revenues 9.9% and EBITDA 5.1% for the same period, with comparable-store sales up 3.9%
