Target will invest another $2 billion in its business this year to spruce up stores, remodel locations and invest in workers, the retailer said Tuesday as it outlined plans to try to reverse a persistent sales malaise and reclaim its footing in fashion and home categories.

Out of all the earnings periods Target reports over the year, Q4 is the most important because it covers the holiday shopping season when consumers are traditionally most willing to spend on non-discretionary items—a category that is Target’s bread and butter.

CEO Michael Fiddelke said Tuesday that Target was beginning its “next chapter of growth” and would improve its merchandise and store design to win back shoppers. Target will increase capital spending by 25% to $5 billion this year to bolster operations, technology and other areas of the business.

Target has been lagging behind its main rival, Walmart, but a new CEO is trying to change that.

Explicit guidance has shifted from cautious (low single-digit decline previously) to projecting "around 2%" sales growth and higher operating margin rate, reflecting increased management confidence in returning to profitable growth.

The big-box retailer Target posted its fourth-quarter results as it hosted an investor meeting at its Minneapolis headquarters.