Carlo Ancelotti admitted Everton failed to compete for the first time since his arrival at the club, but backed them to recover from their 4-0 thrashing by his former team Chelsea.

The Toffees' winless run stands at three Premier League games after goals from Mason Mount, Pedro, Willian and Olivier Giroud helped Chelsea to an easy win at Stamford Bridge.

Everton are 12th in the table as they prepare for the Merseyside derby against Liverpool at Goodison Park on March 16, but Ancelotti insisted a top-six finish is within reach.

"Everything went wrong," said Ancelotti. "It's not difficult to judge this game, to analyse this game. We were not good enough defensively.

"We were too open, not compact, lost a lot of duels, and with the ball we made a lot of mistakes on passes. So it wasn't a good game. Not a good day, but we can learn from our mistakes.

"Honestly, it's the first time, the first game where we didn't compete. Usually, in the other games, also we didn’t win but we competed until the end of the game.

"We've never talked about Champions League. This team was close to relegation. We are still there, six points from the Europa League. We have to fight for this."

Everton lost only one of their first eight top-flight matches under Ancelotti, but have tasted defeat in two of their last three as they head into a run of games against Liverpool, Leicester City and Tottenham.

Ancelotti was asked about the club's prospects of playing in the Champions League – a competition he won twice with Milan and once with Real Madrid – and the Italian is upbeat about Everton's potential.

"That's the target of the club," he said. "In the future.

"We have to improve, of course. As I said, today we were not at the same level as Chelsea. A week ago, though, we were at the same level as Manchester United.

"You cannot judge a team on one week. At the end of the season we will see where we are. But the future is set: this club wants to be competitive in the Premier League and Europe."