Target has unveiled a $6 billion investment plan to revive growth after reporting its 13th consecutive quarter of weak or falling sales, as newly appointed chief executive Michael Fiddelke conceded the retailer had “lost our way” in recent years.

Speaking at an investor presentation at the company’s Minneapolis headquarters on Tuesday, Fiddelke said: “We used to be strong and a pacesetter. We haven’t been for the last few years.” He added that the leadership team was beginning “a new chapter at Target and it’s all about growth”.

The company said it would allocate about $6 billion this year to stores, staff and technology, funded in part by cost reductions including corporate lay-offs. Executives outlined plans to remodel departments, accelerate product development and devote more floor space to higher-performing categories such as grocery and beauty.

Target forecast net sales growth of about 2 per cent this year, which would mark its first annual increase in four years. In February, the first month of the current quarter, sales rose, the company said.

Fourth-quarter comparable sales, covering stores and digital channels open at least a year, fell 2.5 per cent in the three months to 31 January, with full-year comparable sales down 2.6 per cent. Net profit for the quarter declined 5.2 per cent to $1.1 billion.

Shares in Target rose 6.7 per cent on Tuesday, making it one of the strongest performers in the S&P 500 after its outlook exceeded Wall Street expectations.

At the investor event, Mara Sirhal, senior vice-president of home, said: “Our home business has not delivered to its potential, point blank,” as she detailed plans to redesign nearly all products in the category and overhaul store layouts. The retailer will relaunch its Threshold home brand, speed up apparel cycles and introduce a new beauty studio concept in 600 stores later this year.

Fiddelke, who succeeded Brian Cornell on 1 February after more than two decades at the company, said in an interview that “Target is not an everything store” and that the focus would be on “busy families” as its core customer base.

Target has faced mounting competition from rivals including Walmart and Amazon, which have reported stronger recent sales as shoppers prioritised low prices and convenience.

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