Lego sales increase while other toy makers still struggling
Spread the love

The company’s revenue increased by 1% during the first half of 2023, reaching 27.4 billion Danish kroner, or $4 billion.

Lego is building positive results brick by brick while other toy companies struggle to deal with inflation-fueled sales slumps.

In the first half of this year, revenue at the privately held Danish toymaker reached 27.4 billion Danish krone, or about $4 billion.

Mattel, Hasbro, Funko, and Jakks Pacific have all reported double-digit revenue and sales declines so far this year.

The fact that we continue to outgrow the industry makes me very satisfied, CEO Niels Christiansen told. “Over the last four to five years, we have consistently outgrown the market by 10 percentage points … that means we’ve been taking market share consistently, and that’s extremely important.”

Parents sought ways to keep their children occupied during lockdowns during the Covid-19 pandemic, causing toy manufacturers across the industry to see massive gains. It was not just children who returned to the toy aisle to escape boredom.

With a diverse lineup of products that cater to kids and adults, Lego outperformed the industry and gained market share in the pandemic era.

In addition to macroeconomic pressures, the company has also experienced higher shipping costs, material costs, and energy costs.

In the first half of the year, the company earned 5.1 billion Danish kroner, or about $742 million, down 17% from the same period in 2022.

During the first half of the year, raw material costs were a major expense for the company, but Christiansen predicted those costs will decrease as prices decrease.

By placing manufacturing plants near key markets, Lego is able to offset some of the higher shipping costs. Lego products are manufactured in Mexico, for example, in the U.S. The company plans to open a new facility in Virginia in the next two years.

In addition, Christiansen said Lego’s eclectic selection of building sets has helped narrow the gap. In the first half of the year, consumer sales grew by 3%.

The products range from Star Wars themed sets to buildable muscle cars and cityscapes.