Lego keeps building on its lead versus toy rivals.
The maker of the iconic Lego brick reported Wednesday that first-half revenue rose 13% year over year to 31 billion Danish kroner ($4.64 billion). Operating profits increased at a faster pace, up 26% to 8.1 billion DKK ($1.2 billion), despite investments in areas like new stores and digital.
Lego called out strength in its bread-and-butter building sets in the US and Europe.
"[The results show us] clearly taking market share in a toy market that's not growing right now," Lego CEO Niels B. Christiansen told Yahoo Finance.
Lego has managed to defy the odds in what remains a challenged global toy industry as inflation-weary shoppers watch their budgets.
Sales of toys for the G12 countries fell 1% to $24.5 billion from January to June 2024, according to data from industry research firm Circana. The average selling price for toys was relatively unchanged at $11.57.
Only four of the 11 toy "super-categories" experienced sales growth from the G12 countries, underscoring the pressure the category is under.
One bright spot in the data played right into the hands of Lego: Sales of building sets rose 20% in the first half of the year.
Toy sales have "stabilized," said Circana global toys industry adviser Frederique Tutt.
"As we move through the second half of the year and prepare for the holiday season, we expect to see more new products being launched that will deliver excitement for children and adults alike. The industry will continue to gain traction in product categories including building sets, plush, robotic interactive pets, and collectibles," Tutt added.
Christiansen said Lego will spend the rest of its fiscal year investing in its digital capabilities and new stores around the world.
The longtime Lego CEO added the crucial holiday shopping season is shaping up reasonably well.
"It is hard to say even four months out [how the holidays are looking]. That's a long time in our industry. But I think when I look at it from our lens here, there's good momentum, and it doesn't seem like things are very different much forward than if I look four months backwards," Christiansen added.
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