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Lego earnings grows 2% in 2023, as CEO hails ‘very, very tough’ U.S. development

The manager govt of Denmark’s Lego on Tuesday mirrored on a substantial year for the world’s largest toymaker, and outlined the firm’s long-time length plans to protect relevant and “frosty with formative years.”

Lego talked about its 2023 earnings changed into once 2% increased compared with the old year, increasing to 65.9 billion Danish krone (spherical $9.65 billion). This changed into once per expectations, Lego talked about in an announcement.

“It changed into once a elaborate year,” Lego CEO Niels Christiansen informed CNBC. Alternatively, he talked about the firm had “managed to take barely quite of market share.”

The Danish toymaker talked about operating earnings declined a runt bit from 17.9 billion Danish krone to 17.1 billion, noting that it had boosted spending on strategic initiatives designed to force development.

Gather earnings got here in at 13.1 billion Danish krone in 2023, compared with 13.8 billion the old year.

Consumer gross sales were up 4% despite slumping in China, Lego talked about, attributing the growth to rising query of in the U.S. and central and jap Europe.

It comes as the broader toy industry has been struggling to protect development after booming for the length of the coronavirus pandemic, when dad and mom hunted for original ideas to entertain their formative years and adults re-chanced on childhood pastimes.

Toy firm Hasbro earlier this month talked about its 2023 earnings fell by 15% compared with 2022 and that it anticipated to imagine an extra decline this year.

Lego sees development doable in China

“On the U.S. aspect I feel we have seen very, very tough development,” Christiansen talked about. “Even supposing the market in the U.S. changed into once furthermore detrimental we in actual fact managed to develop barely very without grief.”

Nonetheless, Lego struggled in China closing year. Christiansen talked about this changed into once due to the the more complex total economic prerequisites in the nation. Customers unexcited purchased Lego items, nonetheless on the total selected one with smaller price parts, he talked about.

Despite this, Christiansen believes there is very critical long-time length doable for Lego in China.

“We are on the growth inch in China and hoping and waiting for to gain encourage to development,” he talked about. This involves opening original stores all around the nation, with spherical 40 further stores anticipated in 2024, he talked about.

“Each person knows every time we gain out to a brand original city we commence a retailer, we commence up the emblem building activities spherical, we work with companions, then it gets off the ground,” Christiansen talked about.

Lego on Tuesday talked about it had opened 147 stores in 2023, resulting in over 1,000 stores worldwide. Christiansen talked about spherical 100 more are anticipated to commence in 2024.

The toymaker talked about it had its finest ever product offering in 2023 with 780 readily accessible products, spherical half of which were original releases.

‘Staying relevant’

The most common ranges incorporated Lego Icons, which changed into once centered at a a runt bit older viewers and involves items cherish the Astronomical and Eiffel Tower, Lego’s Metropolis line and Lego Technic, which covers builds akin to hotfoot vehicles. Its Star Wars and Harry Potter products were furthermore among the most common traces.

Lego products along side flower bouquets and plants have furthermore change into current on social media, garnering tens of millions of likes in TikTok videos, and the firm launched a collaboration with current online recreation Fortnite that comprises Lego’s brick figures and backdrops.

Licenses and collaborations cherish this are key to Lego’s long-time length plans and to “staying relevant and frosty with formative years,” Christiansen informed CNBC.

“We want to be there the place they’re and we want to be providing them with the form of experiences they really admire,” he talked about. “We are competing for formative years’s time and a spotlight.”

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