The ratings on Toronto-based Canadian Tire Corp. Ltd. reflect the company's leading position as the country's largest hard goods retailer, specializing in the automotive, sports and leisure, and housewares categories operating in an inter-related network of businesses engaged in retail, financial services, and petroleum. The ratings on Canadian Tire are further supported by the company's resilient earnings and consistent same-store sales growth in the past several years, strong liquidity, and a well-managed credit card operation that contributes significantly to operating income. These factors are offset by profitability measures that are only average for the ratings category; operating margins that have grown very gradually in the past few years, despite a heavy capital program; and a very competitive operating environment. Canadian
