Adidas lowered expectations for 2022 after a first-quarter slump as renewed Covid-19-related lockdowns in Greater China continue to hit the German sportswear company.

First-quarter currency-adjusted sales shrank by 3 percent worldwide, to 5.3 billion euros ($5.58 billion), while profit from continuing operations fell 38 percent, to 310 million euros, it said on Friday.

In Greater China, sales collapsed by 35 percent in the first quarter; for the year, revenue is expected to fall significantly due to store closures and strong traffic declines.

The company now expects to come in at the lower end of its 2022 forecast for an 11-13 percent increase in currency-neutral sales as well as for net income from continuing operations of between 1.8 and 1.9 billion euros.

Adidas also cut its operating margin forecast, saying it will remain at the previous year’s level of 9.4 percent instead of increasing to 11 percent.

“In this environment, characterized by severe external challenges, it is imperative to stay focused on our strategic objectives,” said Chief Executive Kasper Rorsted.

“While we will remain agile, we will not jeopardize our long-term growth opportunity for short-term profit optimization.”

The company expects a return to growth in the second quarter despite the continued sales decline in Greater China and a 200-million-euro negative impact from supply chain constraints.

In the second half of 2022, net sales are expected to grow over 20 percent, driven, among other things, by unconstrained supply, strong momentum in Western markets and major sports events.

• Reporting by Alexander Huebner, Writing by Miranda Murray, Editing by Riham Alkousaa and Tomasz Janowski