Target forecast annual sales and profit above estimates Tuesday as it prepares for a new era under CEO Michael Fiddelke, who is focusing more on remodeling the retailers' stores and bolstering its digital business.

Shares of the Minneapolis-based retailer were up 4% in trading before the bell. They have fallen for four straight years, lagging rivals such as Walmart.

Target has largely relied on discretionary categories such as apparel and home furnishing to drive nearly 30% of its annual sales, but the business has become a persistent drag as uncertain economic conditions prompt shoppers to curb their spending habits.

Under new CEO Michael Fiddelke, Target is focusing on revamped merchandising, sharper pricing and store-experience upgrades to coax shoppers back.

"Target saw a healthy, positive sales increase in February, serving as an important milestone on our path back to growth this year, and reinforcing my confidence in the momentum we're building and the future we're creating together," Fiddelke said.

The company expects 2026 net sales growth of 2%, compared with the expectations of a rise of 1.76%, according to data compiled by LSEG.

It projected full-year earnings per share in the range of $7.50 to $8.50, largely above estimates of $7.67 per share.