Lego has reported a significant uptick in sales, rising by 12% in the first half of the year, driven by parents steering children towards activities that do not involve smartphones. The Danish toy manufacturer recorded sales of 34.6 billion Danish kroner (approximately £4 billion) during this period, outperforming the global toy market, which grew by 7%.
The company’s CEO, Niels B Christiansen, highlighted that the increase could be linked to parental concerns regarding the negative influence of social media on children’s mental health. “We see ourselves as competing for children’s time,” Christiansen stated. He emphasized the importance of providing engaging experiences to divert children from screens.
Market Trends and Competitive Landscape
Lego’s strong performance coincides with notable growth in other companies focusing on screen-free alternatives for children. For instance, UK-based Yoto nearly doubled its sales last year to £94.8 million and anticipates reaching profitability in 2025, according to a report by the Financial Times. Research from GWI indicates that social media addiction is among parents’ top three concerns for their children, alongside the climate crisis and global conflict.
To maintain relevance among younger audiences, Lego is expanding its product offerings. The company has recently signed agreements to produce toys associated with popular franchises like Bluey and Pokémon. Furthermore, Lego’s initiatives include the She Built That campaign, aimed at inspiring girls to engage creatively with their products.
Strategic Growth and Sustainability Initiatives
Lego’s net profit rose 10% to 6.5 billion kroner, reflecting a robust demand for its innovative product lines, particularly the Botanicals series aimed at adult customers. Christiansen noted that sales are also rebounding in China following a challenging start to 2024, with expectations of a 9% growth in worldwide sales in the latter half of the year due to strong consumer interest.
The company is actively managing its supply chain in response to ongoing trade dynamics. While some tariffs on imports from its Mexican factory, which services the US market, remain, Christiansen indicated that certain items have been exempted due to agreements between the two countries. He affirmed that these tariffs have not yet influenced retail prices in the US, and the company has no plans to increase prices this year.
In line with its sustainability commitments, Lego is advancing on its target for 60% of materials to be sourced sustainably by year-end. The company is introducing innovative materials, such as toy tyres made from recycled fishing nets and e-methanol derived from renewable energy, ensuring that its product lines are both engaging and environmentally friendly.
Lego is also on track to open a new factory and distribution center in the US, with an investment of $1.5 billion, projected for 2027. This will be the company’s seventh factory globally. Despite the introduction of new tariffs, the development of this facility will proceed as planned, reinforcing Lego’s commitment to meeting increasing demand through localized production.
Overall, the strong sales figures and strategic initiatives position Lego well within the competitive landscape of the toy industry, appealing to both children and parents seeking meaningful, screen-free engagement.
