Lego Earnings Are a Mixed Bag as Revenue Is Up, But Profit Stumbles
Key takeaways
- Lego reported a 1% rise in revenue, but profit slumped
- Lego’s market share has also grown 10% according to the CEO
- The company isn’t publicly traded, but its rivals like Hasbro, Mattel and Funko saw a boost to their share prices at the news
When it comes to selling colorful plastic bricks, Lego has the market cornered. That’s exactly why it saw its market share grow in the first half of 2023, despite a slowdown in the Chinese market and a slowdown in consumer spending. It wasn’t all roses, though, as The Lego Group struggled on profit — here’s the latest.
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What happened with Lego’s earnings?
The Lego Group, maker of beloved plastic bricks toy sets, had mixed financial results for the first half of 2023. Revenue for Lego rose 1% in the first half of 2023, reaching about $4 billion. But profit was at its lowest ebb in 20 years, with net profit for H1 reaching around $742 million, down 17% from the same period last year.
Consumer sales grew by around 3% and the toymaker opened 89 new shops this year, with 54 of those in China. CEO Niels Kristiansen said it had been a “challenging six months for the toy industry” but that The Lego Group had “taken market share and have grown 10% faster than the market” — an impressive feat, given the macroeconomic picture.
He also commented that Lego’s growth is now predicted to end the year “at a single-digit growth rate”.
How did the stock fare?
Despite being one of the most iconic toy brands in the world, Lego isn’t a publicly traded stock. Since the business was founded in 1932, it’s stayed with the same family, the Kristiansens, to keep control. The current owner is Kjeld Kirk Kristiansen, the grandson of the original founder.
We can see how other rivals’ share prices reacted to the earnings beat news. Mattel saw a 1.2% boost to its share price, while Hasbro rose 0.6%. Funko, which makes the Funko Pop figurines, rose 0.3%.
The bottom line
Lego isn’t wholly immune to the pullback in consumer spending (have you seen the price of Lego sets these days?), but the company has certainly fared better than its counterparts. Kids and adults alike love Lego, with the brand likely able to weather further financial storms.
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