Lego sales leap 17% as fans buy bigger, more complicated sets

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  • Lego’s revenue jumped 17% in 2022, reaching DKK 64.6 billion, or about $9.28 billion.
  • The toy maker was not immune to macroeconomic pressures during the year, including the war in Ukraine and rising costs.
  • However, Lego was able to offset these costs thanks to strong demand for a diverse set of building sets.

Lego sales are based on growth during the pandemic era, fueled by a diverse range of products aimed at both children and adults.

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The privately held Danish toymaker said on Tuesday that 2022 revenue jumped 17% to reach DKK 64.6 billion, or about $9.28 billion.

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Lego has been among the toy companies that have made huge strides during the pandemic and continue to outperform industries and gain market share.

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The company was not immune to macroeconomic pressures throughout the year, including the war in Ukraine, Covid restrictions and increased costs for materials, shipping and energy.

Lego offset some of these shipping costs by locating manufacturing facilities near key markets. For example, the US currently gets its products from a factory in Mexico. That supply chain will shrink in the next two years when Lego opens a new plant in Virginia.

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Another factor offsetting those costs has been strong demand for a variety of Lego building sets, CEO Niels Christiansen told CNBC.

“People are buying more,” Christiansen said. “It’s not price increases, it’s people buying bigger and more complex sets. It’s a combination of volume and value.”

Net income for the full year reached DKK 13.8 billion, or about $2 billion, up about 4% from 2021.

Christiansen pointed to the strength of the Lego brand and its diverse product line that will hit many “passion points” for strong performance in 2022. These products range from Star Wars and Harry Potter themed sets to botanical flower arrangements and muscle car replicas. .

About 48% of the Lego portfolio for 2022 is in the new product category, he said. This is at the level of previous years and is part of the company’s strategy to release fresh and up-to-date kits for all consumers. Sometimes that means using a hit movie or TV show like Stranger Things or expanding its catalog to include wall art.

Christiansen also noted that Lego has been working to diversify its price points as inflation and uncertainty hit consumers last year. He said the company was looking for ways to offer a wide range of kits for all budgets.

The company is also reaping the benefits of opening stores in new markets, especially in China. In 2022, the company opened 155 stores worldwide, about half of them in this region. Lego plans to add 145 more locations in 2023.

Christiansen said store traffic has begun to exceed 2019 levels and noted that the in-store experience remains a high priority for the brand. Lego has always used its traditional stores as a place for consumers to explore new products and get their hands on physical bricks.

Employees are also trained not to sell guests, but to give them experiences. The strategy is based on the belief that customers will leave a positive impression of the brand – an impression that will dominate their minds when they are going to buy toys in the future.

This has become a key strategy for customers in China because they have only recently become familiar with Lego bricks.

Online sales also remain important to the company. While the percentage between digital and offline sales is not specified, Christiansen said Lego is seeing “good momentum” online, with brick and mortar sales continuing to fuel his confidence in new store openings.

As the new year approaches, Lego hopes to continue capturing market share and increase its revenue in 2022. Christiansen said the company expects full-year growth to reach high single digits.

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