The world's largest yoghurt maker, with brands including Actimel and Activia, said its European dairy business continued to improve in the quarter and kept its full-year sales and profitability goals, saying it was targeting a return to "strong, sustainable, profitable growth" from the second half.

Like-for-like group sales grew 2.2 percent year-on-year in the quarter, a slowdown from 2.9 percent growth in the fourth quarter of 2013, Danone said on Wednesday.

The performance was slightly better than the company-compiled average analyst estimates of 2.1 percent growth in group sales and a 9 percent decline in baby food sales.

Total sales, which include the effects of foreign exchange fluctuations, reached 5.06 billion euros (4 billion pounds), a reported decline of 5.2 percent due to negative currency effects.

Danone kept its 2014 target of like-for-like sales growth of 4.5-5.5 percent. It also stuck to a forecast for its 2014 operating margin to be stable within a range of 20 basis points lower to 20 basis points higher.

(Reporting by Dominique Vidalon; Editing by James Regan)