UPDATE 1-Metro sales recover in key market Germany despite forex hit
* Q3 sales 15.5 bln euros, meet Reuters poll consensus
* Confirms profit guidance just above prior yr 706 mln euros
* Like-for-like sales up 1 pct in Germany
* Shares up strongly in recent weeks on turnaround hopes (Adds details on regional sales, shares)
BERLIN, Oct 17 (Reuters) - German retailer Metro reported a return to growth in its home market as a turnaround plan starts to bear fruit, and said it was upbeat for the key Christmas period despite a hit to third-quarter sales from volatile foreign exchange rates.
Europe's fourth-biggest listed retailer, which runs cash and carries, supermarkets, department stores and Europe's biggest consumer electronics chain, on Thursday reported third-quarter sales fell 2.1 percent to 15.5 billion euros ($20.9 billion), meeting analysts' average forecast.
However, sales grew 1.8 percent after stripping out the impact of currency effects from Russia, Turkey, India and Japan, as well as divestments like the sale of Real in eastern Europe, accelerating from a rise of just 0.1 percent in the first half.
Chief Executive Olaf Koch, who is trying to turn round a group hit hard by a downturn among independent retail and hospitality industries, said improved sales, particularly in Germany, showed the firm was on the right track.
Retail sales in Europe's largest economy Germany, now waiting for a new government to be formed after an election victory by Chancellor Angela Merkel's party last month, rose in August for the first time in three months.
The cash and carry business, which accounts for almost half of group sales and which Koch has controlled directly since March, reported like-for-like sales growth in Europe and its Asia/Africa division, with Germany showing the strongest rise.
Metro's Media-Saturn electronics chain, which is cutting prices to cope with online competition, saw sales fall 0.1 percent, although they returned to growth in Germany with a like-for-like rise of 3.1 percent.
Metro, which reports full results on Dec. 12, confirmed its guidance for earnings before interest and taxation (EBIT) to "slightly exceed" the 706 million euros of the prior year.
The shares were indicated down 2.6 percent at 0603 GMT in trading before markets open according to brokerage Lang & Schwarz, while the German bluechip index DAX was indicated to open unchanged.
Hopes for a turnaround at Metro have boosted its shares in recent weeks and they have also been helped by speculation that Haniel, the family-owned conglomerate firm that also owns a big stake in Metro, could sell drugs distributor Celesio, potentially freeing it up to invest more in Metro.
($1 = 0.7412 euros) (Reporting by Emma Thomasson; Editing by Peter Dinkloh and Mark Potter)
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