UPDATE 2-L'Oreal blames tough trading for sales warning

* Issues second sales warning in three months

* Cuts full-year sales growth target to 4 pct, from 6 pct

* Q3 sales 4.266 bln euros vs Reuters poll 4.352 bln euros

* Sees 2008 net earnings per share growth of 7-8 pct

(Adds details, management comments)

By Astrid Wendlandt

PARIS, Oct 30 (Reuters) - French cosmetics group L'Oreal (OREP.PA) on Thursday cut its full-year sales forecast for the second time in three months, hit by tougher trading conditions, and posted third-quarter sales that came below forecasts. The world's biggest beauty products group said it expected full-year sales growth of 4 percent, down from a previous forecast of around 6 percent at the end of August and 6-8 percent prior to its first sales warning in July.

"We do not anticipate that there will be an enormous change between now and the end of the year," L'Oreal Chief Executive Jean-Paul Agon told analysts in a conference call.

"It is likely that the economic environment will not be all that promising in 2009," he added.

The Paris-based group, which sells Garnier hair products and Biotherm creams, made sales of 4.266 billion euros ($5.57 billion) in the three months to Sept. 30, up 2.7 percent on a like-for-like basis and 3.4 percent on a reported basis.

The performance compared with expectations of 4.352 billion euros and like-for-like growth of 5 percent based on a Reuters poll of 10 analysts.

"The market slowdown was particularly noticeable in the final weeks of the quarter with the combined impact of low level of consumer spending, stock adjustments by distributors and caution of some distributors in their orders," Agon said.

L'Oreal, previously known in the industry for double-digit earnings per share (EPS) growth, said this year net EPS growth would be in the order of 7-8 percent at constant exchange rates.

The company's sales warning comes after U.S.-based Avon Products (AVP.N), the world's largest direct seller of cosmetics, posted a lower than expected quarterly profit this week and Estee Lauder (EL.N) slashed its full-year outlook.

L'Oreal's comparable sales fell 5.7 percent in North America and 1.8 percent in Western Europe during the third quarter but rose 15 percent in the rest of the world with the strongest growth coming from Eastern Europe.

"The rest of the world seems to be still growing quite well but I cannot guarantee that it will be the same rhythm exactly," Agon said about the months ahead.