Danone keeps 2017 goals despite Q2 sales slowdown

PARIS, July 27 (Reuters) - French food group Danone posted a higher-than-expected rise in first-half operating profit, helped by cost control and synergies from its acquisition of U.S. organic food producer WhiteWave.

Sales growth, however, slowed down further in the second quarter, with Danone's performance coming in below that of its European peers, amid challenging conditions for its dairy business in Europe and in north America.

The world's largest yogurt maker, whose brands include Actimel and Activia, said a strong improvement in earnings per share and profit margin in the first half boded well for its ability to reach its full year 2017 targets.

First-half operating profit reached 1.72 billion euros ($2 billion), a like-for-like rise of 7.3 percent, which was above a company-compiled median of analyst estimates for 1.646 billion euros.

Second-quarter like-for-like sales, however rose 0.2 percent - below analyst expectations for 0.4 percent growth.

This marked a slowdown from 0.7 percent growth in the first quarter and lagged the 3 percent growth achieved by Unilever and the 2.4 percent by Nestle in the second quarter.

Nevertheless, Danone reiterated it expected double-digit earnings per share (EPS) growth at constant exchange rates for 2017 with a "moderate" like-for-like sales growth.

($1 = 0.8516 euros) (Reporting by Dominique Vidalon; Editing by Sudip Kar-Gupta)