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Lego is clearly building a big year.
The toy-selling giant reported today that sales for the first half of the year increased 21% from the prior year to 41.9 billion Danish kroner (approximately $6.54 billion). Gains were driven by all major geographic regions.
Operating and net profits rose at a faster pace than sales — 22% and 32%, respectively — even as Lego invested in new stores and manufacturing capacity.
The gains border on stunning, especially in the US, where consumers continue to battle high levels of inflation and are thinking twice about making discretionary purchases.
“We typically have grown quite a lot faster than the market, and we’ve done it by taking market share, and in this sense, that has actually helped us to cope both when the market was good and when the market was less than good,” Lego Group CEO Niels B. Christiansen said on Yahoo Finance’s Opening Bid.
The company released an impressive 332 new products in the first half, with results powered by Formula One, the new Smart Play system, and botanicals building sets.
Smart Play, released earlier this year, fancies up brick sets with sensors that can react to movement, play sound, and light up.
As for the second half of the year, Lego will have all of this on its plate: a new Pokémon partnership in the market, volatile oil prices, and renewed global trade tensions (such as the latest US-Canada dustup).
The response to new Pokémon products, launched on Aug. 1, has been “super positive,” Christiansen said.
On the trade front, Christiansen noted that Lego has dealt with trade volatility for a while. “One of the advantages we have is our supply chain is regionalized in the way that we produce in the Americas what we sell in the US and Americas. We produce in Europe for Europe and in Asia for Asia,” he said. “That means we’re not shipping products around the world.”
“We haven’t changed pricing because of oil prices,” Christiansen added. “We push hard on our internal productivity to be as efficient as possible to outbalance whatever impact. We are also moving very much into sustainability, buying a lot of material now that is sustainable and from renewable sources. That, hopefully over time, will also be a little bit less dependent directly on oil prices. But I would say so far we’ve been able to manage also internally the consequences of oil, both in terms of product price but also in terms of distribution price.”
Brian Sozziis Yahoo Finance’s Executive Editor, host of thePower Players with Brian Sozzipodcast, and a member of Yahoo Finance’s editorial leadership team. Follow Sozzi on X@BrianSozzi,Instagram, andLinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.
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