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 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, particularly after giving effect to the cash- and debt-financed acquisition of Forzani, as well as competitive market conditions and uneven consumer activity in Canada. We believe that the acquisition of Forzani will have some modest benefits for the company's satisfactory business
