UPDATE 1-Danone expects to hit targets despite product recall
* Recall had significant impact on baby nutrition division
* On track for 5 pct Q3 sales growth
* Expects to meet 2013 targets for sales growth and margin
* Shares down 2.3 percent
(Adds detail, shares)
PARIS, Aug 30 (Reuters) - French dairy group Danone expects to hit its growth targets for the remainder of the year despite the "significant impact" of a product recall affecting its baby nutrition operation in Asia.
Danone is considering legal action against New Zealand's Fonterra after incorrect tests by the maker of Karicare milk formula prompted a global food safety scare and a number of product recalls.
Pierre-Andre Terisse, Danone's finance chief, said that action plans to restore sales in the affected markets would keep the company on track for third-quarter organic sales growth of about 5 percent and its growth and margin targets for the full year.
The world's largest yoghurt maker has a target of organic sales growth of at least 5 percent and of a decline of between 30 and 50 basis points in operating margin for 2013. The company last month reported a 6 percent rise in like-for-like first-half sales.
Danone shares were down 2.3 percent in early Friday trade, underperforming a flat CAC-40 index of French blue-chip companies.
(Reporting by Dominique Vidalon, James Regan; Editing by David Goodman)