Starbucks Corp reported a stronger-than-expected quarterly profit and raised its forecast, in the latest signs that the chain is turning around after closing cafes and slashing costs, and its shares rose 4.1 percent.

The company raised its target for fiscal 2010 earnings excluding items to growth of 15 percent to 20 percent, from a previously forecast growth range of 13 percent to 18 percent.

Starbucks' profit also topped analysts' estimates in the previous quarter, signaling that performance may be improving at the company, which went into the recession with too many stores.

Chief Financial Officer Troy Alstead said more people are visiting Starbucks' cafes and spending a bit more when they do, a trend that started in the third quarter.

Starbucks' net income for its fiscal fourth quarter, ended September 27, was $150 million, or 20 cents per share. A year earlier, Starbucks reported net income of $ 5.4 million, or 1 cent per share.

Excluding items, Starbucks earned 24 cents a share in the latest quarter, topping analysts' average forecast of 21 cents, according to Thomson Reuters I/B/E/S.

Total net revenue was $2.42 billion compared with $2.52 billion a year earlier.

We ended the fourth quarter better than we started the fourth quarter. We are very encouraged by the trends we're seeing, CFO Alstead said in an interview.

But he added: Consumers are still in a tough place. I don't know that they're going to celebrate the end of the recession any time soon.

Starbucks Chief Executive Howard Schultz retook the helm in early 2008, and began a restructuring that has included shuttering roughly 900 units, slashing other costs and eliminating waste.

It boosted its direct-to-consumer marketing through rewards cards and online marketing. It also tightened up operations, tidied up its selection of retail items and rolled out new products like Via instant coffee.

But as Starbucks shrank its store base, competitors like McDonald's Corp and Dunkin' Donuts started selling lattes and other fancy coffee drinks previously found only at Starbucks and neighborhood coffee shops.

Last November, Starbucks shares fell to $7.06, their lowest since late 2001, as the United States and other countries scrambled to contain a meltdown of financial markets.

On Thursday, Starbucks shares rose to $20.50 in after-hours trade, from their Nasdaq close of $19.70.

(Reporting by Lisa Baertlein; editing by Andre Grenon and Steve Orlofsky)

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