The ratings on Toronto-based 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 resilient earnings amid challenging market conditions, in addition to the company's well-managed financial services operation that contributes significantly to operating income. These factors are partially offset in our view by fully adjusted leverage that is high for the rating, as well as competitive market conditions and uneven consumer activity in Canada. Notwithstanding some meaningful changes to Canadian Tire's balance sheet, we do not believe that the conversion to international financial reporting standards (IFRS) changes the underlying economics of any
