Lego Star Wars toys sit on display inside a Toys R Us store in Paramus, New Jersey, Nov. 26, 2019.
Bloomberg | Getty Images
While other toy companies struggle with an inflation-fueled sales slump, Lego is building positive results brick by brick.
The privately held Danish toymaker saw revenue rise 1% during the first six months of this year, reaching 27.4 billion Danish krone, or about $4 billion.
Meanwhile, publicly traded rivals such as Mattel, Hasbro, Funko and Jakks Pacific have all reported double-digit revenue and sales declines so far this year.
“I think what makes me very satisfied is this fact that we continue to outgrow the industry,” CEO Niels Christiansen told CNBC. “We’ve outgrown the market consistently over the past four or five year by 10 percentages points. That means that we have taken market share consistently, and that has been continued. That’s very important.” CEO Niels Christiansen told CNBC. Adults also returned to the toy aisle in order not be bored. The company’s net profit in the first six months of 2018 was 5.1 billion Danish Krone (about $742 million), down 17% compared to the same period of 2022. Lego’s products are shipped to the U.S. from a Mexican factory. That supply chain will shorten in the next two years as the company opens a new plant in Virginia.
Additionally, Christiansen said strong demand for Lego’s eclectic selection of building sets has helped narrow the gap. Consumer sales grew 3% during the first half of the year.
Christiansen pointed to the strength of Lego’s brand and its diverse product line that hits on a variety of “passion points” for its strong performance so far in 2023. These products range from themed sets of Star Wars to buildable muscle cars and cityscapes.
The company is growing its portfolio to around 750 products this year. Christiansen stated that 48% of the portfolio would be new. That’s on par with previous years and is part of the company’s strategy for having fresh and relevant sets for all consumers.
The company also has been reaping the benefits of opening stores in new markets, particularly in China. In 2023, the company has opened 89 stores worldwide, 54 of which are in China. Lego has been introduced to this region and the physical locations are helping to teach adults and children to play with Lego. “I think we can continue to exceed the market. “