Lego Sales Soar Despite Economic Uncertainty
Lego A/S reported a surge in sales for the first six months of 2022 and said it had won market share from rivals, building on its position as the world’s largest toy maker.
The Danish maker of colorful toy bricks said Wednesday that revenue increased 17% compared with the first half of 2021 to 27 billion Danish krone, equivalent to $3.47 billion. It said Star Wars, Technic and Harry Potter themed sets had sold well. Net profit of 6.2 billion krone was down slightly on the 6.3 billion krone reported in the same period last year, during which Lego roughly doubled its profits.
Lego Chief Executive
Niels Christiansen
said the results were strong in light of volatility in the global economy, with the war in Ukraine in particular triggering cost inflation in recent months. The cost of the plastic resin used to produce Lego bricks has risen significantly, as have freight costs, he said.
“So far we’ve been able to grow fast enough to make up for those increases in cost,” Mr. Christiansen said, adding that productivity gains had also helped offset cost inflation.
Lego didn’t implement any price rises during the first half of 2022, meaning revenue growth came mainly through rising consumer demand, Mr. Christiansen said. The company has, though, subsequently increased prices for some products.
While some consumers are also likely to be affected by inflation, Mr. Christiansen said Lego had invested in expanding its product range to cover all price points. The company expects its sales momentum to continue for the rest of the year despite the choppy state of the global economy, he said.
Lego said its growth outstripped wider toy sector growth of 1% in the January-to-June period, enabling the company to grow market share in all regions.
Lego’s revenue increase came despite the closure of its 81 Russian stores at the start of Moscow’s invasion of Ukraine.
Photo:
Jason Alden/Bloomberg News
Hasbro Inc.,
the maker of Monopoly board games and My Little Pony dolls, reported in July that its revenue had increased 1% to $1.34 billion in the quarter ended June 26. Barbie maker
Mattel Inc.’s
second-quarter performance was more in line with Lego’s: its sales rose 20% to $1.24 billion in the quarter ended June 30, the company said in July.
Lego’s revenue increase came despite the closure of its 81 Russian stores—roughly a 10th of its global total—in March following Russia’s invasion of Ukraine. The company confirmed in July that it was shutting the stores permanently.
The loss of the Russian stores was offset by the opening of 66 new stores in other markets, mainly China, during the first half of the year, Mr. Christiansen said.
To meet growing demand for its bricks longer term, Lego is investing in two new factories—one in the U.S. and one in Vietnam. Both sites are due to open by 2026 and will increase the company’s production facilities from five to seven, enabling further growth, Mr. Christiansen said.
Write to Trefor Moss at [email protected]
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
Lego A/S reported a surge in sales for the first six months of 2022 and said it had won market share from rivals, building on its position as the world’s largest toy maker.
The Danish maker of colorful toy bricks said Wednesday that revenue increased 17% compared with the first half of 2021 to 27 billion Danish krone, equivalent to $3.47 billion. It said Star Wars, Technic and Harry Potter themed sets had sold well. Net profit of 6.2 billion krone was down slightly on the 6.3 billion krone reported in the same period last year, during which Lego roughly doubled its profits.
Lego Chief Executive
Niels Christiansen
said the results were strong in light of volatility in the global economy, with the war in Ukraine in particular triggering cost inflation in recent months. The cost of the plastic resin used to produce Lego bricks has risen significantly, as have freight costs, he said.
“So far we’ve been able to grow fast enough to make up for those increases in cost,” Mr. Christiansen said, adding that productivity gains had also helped offset cost inflation.
Lego didn’t implement any price rises during the first half of 2022, meaning revenue growth came mainly through rising consumer demand, Mr. Christiansen said. The company has, though, subsequently increased prices for some products.
While some consumers are also likely to be affected by inflation, Mr. Christiansen said Lego had invested in expanding its product range to cover all price points. The company expects its sales momentum to continue for the rest of the year despite the choppy state of the global economy, he said.
Lego said its growth outstripped wider toy sector growth of 1% in the January-to-June period, enabling the company to grow market share in all regions.
Lego’s revenue increase came despite the closure of its 81 Russian stores at the start of Moscow’s invasion of Ukraine.
Photo:
Jason Alden/Bloomberg News
Hasbro Inc.,
the maker of Monopoly board games and My Little Pony dolls, reported in July that its revenue had increased 1% to $1.34 billion in the quarter ended June 26. Barbie maker
Mattel Inc.’s
second-quarter performance was more in line with Lego’s: its sales rose 20% to $1.24 billion in the quarter ended June 30, the company said in July.
Lego’s revenue increase came despite the closure of its 81 Russian stores—roughly a 10th of its global total—in March following Russia’s invasion of Ukraine. The company confirmed in July that it was shutting the stores permanently.
The loss of the Russian stores was offset by the opening of 66 new stores in other markets, mainly China, during the first half of the year, Mr. Christiansen said.
To meet growing demand for its bricks longer term, Lego is investing in two new factories—one in the U.S. and one in Vietnam. Both sites are due to open by 2026 and will increase the company’s production facilities from five to seven, enabling further growth, Mr. Christiansen said.
Write to Trefor Moss at [email protected]
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
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