Danone keeps goals, Q1 sales beat expectations

PARIS, April 16 Tue Apr 16, 2013 1:31am EDT

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PARIS, April 16 (Reuters) - French food group Danone said business improved at its core dairy unit in the United States and Russia and kept its full-year goals after first-quarter sales growth beat expectations.

The world's largest yoghurt maker, with brands including Actimel and Activia, said sales remained weak in austerity-hit Southern Europe and that it expected consumer trends in Europe to stay negative this year.

Like-for-like sales grew 5.6 percent in the quarter, beating company-compiled analysts' forecasts for 4.2 percent growth, driven by robust demand for baby food, medical nutrition and water.

Total sales, which include the effects of foreign exchange fluctuations, reached 5.338 billion euros ($6.98 billion), a reported rise of 4.3 percent.

Danone kept its 2013 target of like-for-like sales growth of at least 5 percent and of a decline of between 30 and 50 basis points in operating margin.

Danone, which competes with Nestle and Unilever , is the most exposed among big food groups to the euro zone debt crisis and is under presure from U.S. activist shareholder Nelson Peltz to improve its performance.

($1 = 0.7643 euros) (Reporting by Dominique Vidalon; Editing by Christian Plumb)

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