Lego CEO: Building sets are gaining share in a tough toy market

Published On Aug 28, 2024, 10:38 AM

Lego's CEO, Niels B. Christiansen, reported that the company achieved a 13% revenue growth in the first half of the year, reaching $4.64 billion. Operating profits soared by 26%, reflecting Lego's successful strategy in a stagnant toy market. Despite a dip in overall toy sales across major markets, Lego's building sets saw a 20% increase in sales. The CEO emphasized that Lego is capturing market share and plans to invest in digital capabilities and new stores, aiming for a strong holiday season ahead.

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Stock Forecasts

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Negative

Other toy makers struggling amidst the industry's decline may see stagnation or further losses, particularly if they do not adapt quickly to market demands. Firms like Hasbro (HAS) and Mattel (MAT) could face challenges in maintaining profitability given the rising sales of building sets, which Lego dominates.

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Positive

The expected stabilization of the toy market, especially with an emphasis on building sets and collectibles, suggests that ETFs focused on consumer discretionary or toys may benefit, particularly those that include Lego or similar growing brands.

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