Lego Sees 13% Revenue Surge in Early 2024, Driven by Fortnite Collaboration and Varied Brick Collections
Despite a sales slump driven by inflation hitting the toy industry in early 2024, Lego is building its success one brick at a time.
On Wednesday, Lego reported a significant revenue increase for the first half of the year, up 13% to 31 billion Danish kroner, or approximately $4.65 billion.
Niels Christiansen, CEO of the privately owned Danish toymaker, told CNBC that Lego is experiencing strong performance across its product lines, particularly with Lego Icons, Lego Creator, and its collaboration with Epic Games’ Fortnite.
Last year, Lego observed a trend where consumers were opting for lower-priced sets while maintaining their purchase volume. This year, however, the volume of sales has increased, and Christiansen noted that consumers are not trading down further. “What we’re seeing is a stabilization, with most of our growth coming from increased volume,” he said.
In contrast, publicly traded competitors are struggling: Mattel's net sales fell 1% in the first half of 2024, and Hasbro's net revenue dropped 21% during the same period. Mattel is facing challenging comparisons to last year’s Barbie-driven surge, while Hasbro is still adjusting after its eOne divestment.
Lego continues to leverage its pandemic-era momentum with a wide range of offerings that appeal to both children and adults. In addition to sets related to popular franchises like Harry Potter and Star Wars, Lego offers innovative designs for building flowers, famous artworks, and animals.
Sales remain robust in the U.S. and Europe, though growth in China has plateaued. Christiansen explained that consumers in China are spending less on higher-priced items and purchasing less frequently. Nevertheless, Lego remains committed to expanding in China, with 20 of the 40 new stores opening in the first quarter located there, and 20 out of 60 planned openings in the latter half of the year also set for China.
On the sustainability front, Lego has nearly doubled its use of renewable and recyclable materials in its bricks compared to all of 2023. Christiansen highlighted this achievement as a significant milestone, noting that the company is investing heavily in these more expensive materials but is not passing the cost onto consumers. “By investing in these materials, we’re also encouraging suppliers to innovate and expand production capacity,” he said.
Looking ahead, Lego aims to source 50% of its raw materials from sustainable sources over the coming years.
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“I’ve been asked to participate in the transition team and help select the individuals who will be leading the government,” Kennedy shared.
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