Lego Revenue Surges Despite Industry Slump

Despite an inflation-fueled sales slump in the first half of 2024, Lego has seen significant revenue growth, boosting its market share in the toys industry.

• Lego's revenue jumped 13% during the first six months of 2024, reaching 31 billion Danish kroner, or about $4.65 billion.
• The company attributes its success to strong performance across its portfolio, particularly with Lego Icons, Lego Creator, and its partnership with Epic Games' Fortnite.

Lego's Growth Strategy: Volume and Price

Lego CEO Niels Christiansen highlights a shift in consumer behavior, with a focus on volume rather than price cuts.

• In 2023, consumers "traded down," opting for lower-priced Lego sets while maintaining the same purchase volume.
• This year, Lego has seen an increase in volume, suggesting consumers are not further reducing their spending on Lego products.

Comparison with Competitors: Mattel and Hasbro

Lego's success stands in contrast to its publicly traded rivals, Mattel and Hasbro, who faced sales declines in the first half of 2024.

• Mattel experienced a 1% drop in net sales, attributed to tough comparisons from the strong performance of "Barbie" in 2023.
• Hasbro reported a 21% decline in net revenue, impacted by the divestment of eOne.

Lego's Diverse Product Portfolio

Lego's continued growth can be attributed to its diverse product portfolio that caters to both children and adults.

• Lego offers sets based on popular franchises such as Harry Potter and Star Wars, attracting fans of all ages.
• The company also provides innovative design options for building flowers, succulents, famous works of art, and animals.

Lego's Expansion in China

While Lego's sales in the U.S. and Europe remain robust, sales in China have stagnated, with consumers spending less on larger purchases and reducing their buying frequency.

• Despite the slowdown, Lego is not abandoning its expansion plans in China and sees long-term potential in the region.
• The company opened 20 Lego stores in China during the first quarter of 2024 and plans to open another 20 in the second half of the year.

Lego's Commitment to Sustainability

Lego is actively pursuing sustainability initiatives, increasing the use of renewable and recyclable materials in its bricks.

• The company has nearly doubled the amount of sustainable materials used compared to 2023.
• Lego is investing in sourcing more expensive, sustainable materials, incentivizing suppliers to develop and produce these materials.
• The company is committed to sourcing half of its raw materials from sustainable sources in the coming years.