Consumers at a Lego retailer in Shanghai, China, on Feb. 3, 2024.Costfoto | Nurphoto | Getty ImagesAn inflation-fueled gross sales stoop hit the toy business within the first part of 2024, however one corporate is gaining marketplace proportion brick by way of brick.On Wednesday, Lego stated income all over the primary six months of the yr jumped 13%, attaining 31 billion Danish krone, or about $4.65 billion.Niels Christiansen, CEO of the privately held Danish toymaker, informed CNBC that the corporate is seeing energy throughout its portfolio, particularly with Lego Icons and Lego Author, and thru its partnership with Epic Video games’ Fortnite.Closing yr, Lego noticed a development of customers “buying and selling down” or choosing lower-priced units, whilst nonetheless purchasing the similar quantity because the yr prior to. This yr, quantity is up, Christiansen stated.”To the level they traded down final yr, they are now not buying and selling additional down,” he stated. “In order that has stabilized. And we see nearly all the expansion is if truth be told expansion in quantity.”
In the meantime, publicly traded rival Mattel noticed internet gross sales fall 1% within the first six months of 2024 and Hasbro reported that its internet income fell 21% between January and the tip of June. Mattel is dealing with difficult comparisons from toy gross sales fueled by way of “Barbie” in 2023, and Hasbro remains to be reeling from its divestment of eOne.Lego has persevered to construct on pandemic-era expansion with a various slate of goods that cater to youngsters and adults alike. Along with units tied to standard franchises akin to Harry Potter and Superstar Wars, Lego additionally has leading edge design choices for shoppers to construct plants and succulents, well-known artistic endeavors and animals.Gross sales within the U.S. and Europe stay robust, Christiansen famous, whilst China gross sales are flat. He stated shoppers within the area are spending much less on bigger-ticket pieces, and their frequency of buying is down.Alternatively, Lego isn’t giving up on growth in China. Christiansen stated there may be nonetheless “long-term attainable” within the house.Of the 40 Lego retail outlets that opened within the first quarter, 20 have been in China. In a similar way, of the 60 deliberate openings in the second one part of the yr, 20 are set for China.SustainabilityChristiansen 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 is a just right milestone,” he stated. “That is a just right step ahead. [We are] spending somewhat considerably on that during a few tactics, essentially in purchasing subject matter this is costlier, as a result of mass stability subject matter is costlier than simply same old.”Christiansen famous that Lego isn’t passing that value directly to shoppers.”Via if truth be told being keen to pay a top class to get to this product, we additionally created an incentive for [suppliers] to if truth be told increase the type of merchandise and to ascertain extra manufacturing capability for those form of merchandise. We’re operating in point of fact as an business want to check out to place extra pace on that whole procedure.”Over the following couple of years, Lego hopes to supply part its uncooked fabrics from sustainable assets.Don’t omit those insights from CNBC PRO
