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| Lego representatives explained that China's middle class, the group of children who have the conditions to play with Lego toys, is very large, while Lego's presence is still low. (Source: China Daily) |
Lego said its revenue for the January-June period rose 1% to 27.4 billion crowns ($4 billion), compared with a 17% increase in the same period last year and a 27% increase in the same period in 2021. Lego's operating profit fell 19% to 6.4 billion crowns in the first six months of the year.
However, Lego's retail sales rose 3% while the overall market fell 7%, meaning Lego gained market share from rivals such as Hasbro and Mattel, the maker of Barbie dolls.
The Danish toy company did not raise prices on its Lego sets in the first half of the year and has no plans to do so, as shipping and raw material costs have stabilized, CEO Niels Christiansen said.
Lego opened 89 new stores in the first half of 2023 and plans to open a total of about 150 stores this year, taking the global total to about 1,050, Christiansen said. The CEO believes Lego can continue to open stores at this pace for the next 5-10 years.
More than half of Lego’s new stores this year will be in China, where the company’s total store count will exceed 500 by the end of the year, Christiansen said. Lego continues to invest in the market despite a slower-than-expected recovery in in-store shopping by Chinese consumers following the Covid-19 pandemic.
Explaining this strategy, Mr. Christiansen said that China's middle class, the group of children who have the conditions to play with Lego toys, is very large, while Lego's presence is still low, so the company will continue to invest in China.
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