Lego Group is now the world’s largest toymaker by profits and revenue, thanks largely to the popularity of The Lego Movie, which came out earlier this year. The company reported an 11% increase in revenue for the first six months of this year as sales of movie-related products boosted sales.
“Everything is Awesome” at Lego Group
To quote the catchy lead song from The Lego Movie, “everything is awesome” for the Danish toymaker. The company posted sales of 11.54 billion Danish kroner (or $2.03 billion). Net income climbed 14% to 2.72 billion kronor. Lego management said revenue in the first half of this year has more than tripled compared to the same time frame in 2008.
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The gains came despite the difficult economic environment and the slow start to the global toy market earlier this year. Also the toy business has been shifting toward electronic platforms and away from traditional toys like those sold by Lego.
Lego sees strong worldwide growth
In addition to movie-related products, the company also saw strong sales in its legacy products like LEGO City, LEGO Star Wars, LEGO Technic and LEGO Creator. The company saw strong double digit sales growth in the Americas, Europe and Asia. Lego reported that in Asia, China had the greatest growth, as sales grew by over 50% there in the first six months of the year.
Management added that sales in the second half of this year depend on whether the DVD release of the movie is able to keep sales rolling around at the current rate. As of Aug. 21, the movie grossed them $485 million globally. The company saw $69 million from opening weekend at the box office. Lego is also planning a sequel called The Lego Movie 2 for release in 2017. In addition, Warner Bros. plans to release the Ninjago movie, which is based on the company’s ninja-themed products, next year.
Also Chief Financial Officer John Goodwin reportedly told The Wall Street Journal that they are focusing on remaining relevant to children through their evolving play patterns. Even though the company focuses most of its efforts on physical building blocks, Lego is also adding other platforms like digital games for its Legends of Chima series.
Lego beats competitors Mattel, Hasbro
With this year’s strong results, Lego also came out ahead of competitors Mattel, Inc. (NASDAQ:MAT) and Hasbro, Inc. (NASDAQ:HAS). The private toymaker stole the title of biggest toymaker in the world from Mattel, the maker of Barbie products.
Mattel has been struggling as global sales have slumped and demand for its Barbie dolls and Fisher Price toy line has slowed down. The toymaker posted very weak results in July due to weak Barbie sales, and its shares slumped as a result. The company moved into construction toys with the purchase of Canada’s Mega Brands earlier this year, placing it directly in competition with Lego.
Also Lego’s revenue was over 30% higher than Hasbro, which makes many of the world’s most popular board games.