Lego income jumps 13% in first part of 2024, boosted by way of Lego Fortnite and various brick units
Shoppers at a Lego bundle in Shanghai, China, on Feb. 3, 2024.
Costfoto | Nurphoto | Getty Pictures
An inflation-fueled gross sales droop clash the toy trade within the first part of 2024, however one corporate is gaining marketplace percentage brick by way of brick.
On Wednesday, Lego stated income all the way through the primary six months of the yr jumped 13%, achieving 31 billion Danish krone, or about $4.65 billion.
Niels Christiansen, CEO of the privately held Danish toymaker, advised CNBC that the corporate is sight power throughout its portfolio, particularly with Lego Icons and Lego Writer, and thru its partnership with Epic Video games’ Fortnite.
Terminating yr, Lego noticed a development of shoppers “trading down” or choosing lower-priced units, time nonetheless purchasing the similar quantity because the yr earlier than. This yr, quantity is up, Christiansen stated.
“To the extent they traded down last year, they’re not trading further down,” he stated. “So that has stabilized. And we see almost all of the growth is actually growth in volume.”
In the meantime, publicly traded rival Mattel noticed web gross sales fall 1% within the first six months of 2024 and Hasbro reported that its web income fell 21% between January and the top of June. Mattel is going through difficult comparisons from toy gross sales fueled by way of “Barbie” in 2023, and Hasbro continues to be reeling from its divestment of eOne.
Lego has persisted to create on pandemic-era expansion with a various slate of goods that cater to youngsters and adults matching. Along with units fix to pervasive franchises comparable to Harry Potter and Superstar Wars, Lego additionally has leading edge design choices for shoppers to create vegetation and succulents, well-known artworks and animals.
Gross sales within the U.S. and Europe stay robust, Christiansen famous, time China gross sales are flat. He stated shoppers within the patch are spending much less on bigger-ticket pieces, and their frequency of buying is ailing.
Then again, Lego isn’t give up on growth in China. Christiansen stated there’s nonetheless “long-term potential” within the section.
Of the 40 Lego retail outlets that opened within the first quarter, 20 have been in China. In a similar fashion, of the 60 deliberate openings in the second one part of the yr, 20 are all set for China.
Sustainability
Christiansen additionally touted Lego’s sustainability efforts. To this point this yr, the corporate has just about doubled the quantity of renewable and recyclable fabrics it makes use of in its bricks in comparison to full-year 2023.
“That’s a good milestone,” he stated. “That’s a good step forward. [We are] spending quite significantly on that in a couple of ways, primarily in buying material that is more expensive, because mass balance material is more expensive than just standard.”
Christiansen famous that Lego isn’t passing that price directly to shoppers.
“By actually being willing to pay a premium to get to this product, we also created an incentive for [suppliers] to actually develop the kind of products and to establish more production capacity for these type of products. We are working really as an industry need to try to put more speed on that entire process.”
Over the nearest few years, Lego hopes to supply part its uncooked fabrics from sustainable assets.