By Joshua Kirby

Adidas AG said it expects full-year profitability to be dragged by continued declining sales in Greater China after the company's revenue and earnings fell in the first quarter.

The German sporting-goods firm made quarterly sales of 5.30 billion euros ($5.59 billion), 3% lower at constant currency than in the same quarter last year. Operating profit fell to EUR437 million from EUR704 million previously, on an operating margin that contracted by more than 5 percentage points to 8.2%.

In Greater China, Adidas booked a 35% fall in sales amid a challenging market environment exacerbated by pandemic-related lockdowns, offsetting growth in the North America and EMEA regions.

The company said the situation will continue to affect sales in the rest of the year, and it expects a significant decrease in full-year Greater China sales. As such, it now expects full-year sales growth at the lower end of a previously guided range of 11%-13%.

The less favorable geographic mix means the company now sees no growth in its gross or operating margins in 2022, which came in at 50.7% and 9.4% in 2021, respectively. It had previously targeted a gross margin of 51.5%-52% and an operating margin of 10.5%-11% for the year.

Write to Joshua Kirby at joshua.kirby@wsj.com; @joshualeokirby

(END) Dow Jones Newswires

May 06, 2022 02:04 ET (06:04 GMT)

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