Is this sentence correct, and if not, how would you correct it? "Sales are better despite still weak margins"
It isn't incorrect but "continuing" feels more natural and indicates an unchanging trend over time.
Sales are better despite continuing weak margins.
It's a little different to "still" in that it connotes more strongly a future trend as well.
The wording is awkward, but can be improved by using to be to attach the adjective weak to margins:
Sales are better despite margins still being weak.
I do question the logic of the sentence, though - I would have thought it was more logical to say:
Margins are still weak despite better/improved/improving sales.
Though this obviously depends on what margins you're talking about - gross or effective net.
The word Still can be used to make a comparison stronger.
But in that case it is usually used as
The number of people killed in the explosion is likely to rise still higher.
The company is hoping to extend its market still further.
So your sentence may be written as
Sales are better despite still weaker margins.