Stores underperformed the market despite some impressive recent updates, and Anglo-French electricals group Kesa provided a reminder of how tough conditions remained with shocking results on Wednesday.

The retailer crashed into the red last year to the tune of £81.8m, down from a profit of £128.8m the year before. Group retail profit plummeted from £141.3m to £77m.

Pali analyst Nick Bubb said the finals were “a triple-whammy of disappointment in the form of a disappointingly big dividend cut, a disappointing miss on underlying profits and a disappointing lack of anything new on company strategy”. Bubb retained his neutral stance, however, so he could compare Kesa’s performance with arch-rival DSGi,which was scheduled to report after Retail Week went to press.

Investec’s David Jeary put Kesa’s forecasts, target price and recommendation under review. He said: “Much will depend on the continued resilience of Darty, which has performed solidly in our view.”

Bernstein retained Tesco as its top grocery pick following publication of the latest TNS grocery market data. The broker said: “Tesco’s UK sales growth – before contribution of Tesco Personal Finance – currently lags that of Sainsbury’s and Morrisons. However, we expect Tesco’s performance to step up in September as it anniversaries the introduction of its discount brand range.”

Numis analysts met new Moss Bros chief executive Brian Brick last week, when he outlined plans to improve ranges, stores and service. The broker said: “Admittedly we have heard much of this before from Moss Bros. However, Brian seems a savvy operator and we came away considerably more enthused about the outlook for the business.”

Computer entertainment group Game updates next week.

Buy Carpetright, advised KBC Peel Hunt ahead of next Tuesday’s full-year results. The broker believes its profit forecast of £17.2m “represents the earnings nadir” and envisages the start of a recovery next year. “We are confident that cost-saving measures taken, coupled with exchange rate stability, will deliver an improvement in profitability,” noted KBC analyst John Stevenson.

Theo Fennell house broker Seymour Pierce rated the AIM-listed jeweller outperform following the return of the eponymous founder to the board and various director share dealings. Analyst Freddie George said: “We continue to believe the company has a strong brand which has the potential to be exploited internationally when the markets start to recover.”

Market recovery may be some time off in the opinion of Pali’s Nick Bubb. He fears that, like the First World War, retailers’ difficulties will not “all be over by Christmas”.

➤ Last week’s issue incorrectly attributed sell advice on Game from Singer Capital Markets to Investec. Investec actually rates Game a hold.