Lego posts sales growth despite weak global toy market

Danish Lego Company published 1H 2009 financials, reporting a 1% increase in revenue to DKK 27.4 billion ($4 billion) and a 3% increase in consumer sales amid a 7% contraction in the toy market. At the same time, Lego’s operating profit fell by 19% to $932 million, net profit – by 17% to $742 million. Meanwhile, the main competitors of the Danish company in the toy market, such as Mattel, Hasbro, Funko and Jakks Pacific, report in their reports about a double-digit drop in revenue and sales against the backdrop of market weakness.

CEO Nils Christiansen called the six months “very challenging for the toy industry” and this was exacerbated by a slower-than-expected return of Chinese consumers to toy stores. But according to Christiansen, Lego “increased its market share and grew 10% faster than the market.”

The company’s most significant costs in the first half of the year were related to the increase in the cost of raw materials. In the first half of the year, the company opened 89 new toy stores, 54 of them in China, and now Lego 988 stores worldwide. This year, Lego will increase its product range to 750 items, and, according to the CEO, 48% of them are new.

Alena Miklashevskaya