In the first half of 2024, Lego's revenue increased by 13%, thanks to the success of Lego Fortnite and a variety of brick sets.

• In the first six months of the year, Lego reported a 13% increase in revenue, totaling 31 billion Danish krone, equivalent to approximately $4.65 billion.
• The company's portfolio, including Lego Icons and Lego Creator, is experiencing significant growth, and its partnership with Epic Games' Fortnite is contributing to this strength.
• Despite a decline in spending on big-ticket items and less frequent purchases, Lego remains optimistic about the future of the Chinese market.

Despite the inflation-induced sales decline in the toy industry during the first half of 2024, one company is steadily capturing market share.

In the first six months of the year, Lego reported a 13% increase in revenue, totaling 31 billion Danish krone, equivalent to approximately $4.65 billion.

Niels Christiansen, CEO of a privately held Danish toymaker, stated to CNBC that the company is experiencing growth across its product line, particularly with Lego Icons and Lego Creator, and through its partnership with Epic Games' Fortnite.

This year, despite a trend of consumers "trading down" and opting for lower-priced sets, Lego has seen an increase in volume, according to Christiansen.

"They are not trading further down as they did last year, which has stabilized. Most of the growth we see is due to an increase in volume."

In the first six months of 2024, Mattel's net sales fell 1%, while Hasbro reported a 21% decline in net revenue between January and June. Mattel is facing tough comparisons from the success of "Barbie" sales in 2023, while Hasbro is still recovering from its divestment of eOne.

Lego has expanded its product line to include a variety of items that appeal to both children and adults. Along with sets based on popular franchises like Harry Potter and Star Wars, Lego offers unique design options for building flowers, succulents, famous artworks, and animals.

While sales in the U.S. and Europe remain robust, China's sales are stagnant, according to Christiansen. He pointed out that consumers in the region are cutting back on high-end purchases and their buying frequency has decreased.

Despite the challenges, Christiansen believes there is still "long-term potential" for Lego's expansion in China.

In the first quarter, 20 out of the 40 newly opened Lego stores were located in China. Similarly, 20 out of the 60 planned openings in the second half of the year will be in China.

Sustainability

Lego has significantly increased its use of renewable and recyclable materials in its bricks this year, with a nearly doubling compared to full-year 2023.

"That's a significant milestone," he said. "That's a significant step forward. [We are] investing heavily in that in a few ways, mainly by purchasing more expensive material, as mass balance material is more costly than standard."

Christiansen noted that Lego is not passing that cost on to consumers.

"To incentivize suppliers to develop and produce more of the desired product, we created a premium payment system. As an industry requirement, we aim to accelerate the entire process."

In the coming years, Lego aims to obtain half of its raw materials from sustainable sources.