Russia's Magnit sees 2016 sales growth slowing to 17-18 pct

* Sales growth to fall from 24.5 pct in 2015

* Sees EBITDA margin at over 10 pct vs 10.9 pct in 2015

* To open 100-200 more convenience stores than planned (Releads with 2016 guidance, adds CEO quotes, updates share price)

MOSCOW, April 25 (Reuters) - Russia's biggest food retailer Magnit expects sales growth to slow this year as consumer budgets remain tight, its chief executive and biggest shareholder said on Monday.

Magnit, which has more than 12,400 mostly low-cost convenience stores, expects sales to rise by 17-18 percent this year, Sergey Galitskiy said, compared with 24.5 percent in 2015.

Despite a tough economic backdrop, many big Russian retailers are seeing rapid sales growth as they rush to open new stores in a bid to grab share in a still fragmented market.

"We are operating in small towns and are seeing record problems with peoples' budgets, they are as tight as possible," Galitskiy said on a conference call after Magnit's first-quarter results announcement.

Profits at Magnit fell 13 percent in the first quarter, to 8.2 billion roubles ($123 million) after tax, with margins taking a hit from the cost of promotions.

Its gross margin slid to 25.5 percent from 27 percent a year ago while the margin on earnings before interest, taxation, depreciation and amortisation (EBITDA) fell to a five-year low of 7.75 percent from 9.32 percent.

Galitskiy said Magnit sacrificed more than 3 percent of its margins by cutting prices to win shoppers but hoped to achieve an EBITDA margin of just over 10 percent by the end of 2016.

On sales, he said growth would likely accelerate in the second half from 16.7 percent in January-March as inflation was easing although remained a major factor of uncertainty.

Magnit had previously reported a 1.5-percent rise in traffic for the first quarter, while average spending was down 1 percent despite food price inflation in Russia running at 2.3 percent.

Galitskiy also said Magnit would refurbish its convenience stores to make them more attractive for shoppers and would open 100-200 more stores in 2016 than earlier planned.

Shares (Berlin: DI6.BE - news) in Magnit extended losses to trade 7.1 percent lower at 9,564 roubles by 1513 GMT, when the main Moscow market index was down 0.95 percent.

($1 = 66.7220 roubles) (Reporting by Maria Kiselyova; Editing by Mark Potter)