Lego Tops U.S. Toymaker Rivals as Full-Year Sales Jump 10%
Lego A/S, the toymaker featured in a film that’s led U.S. ticket sales for three weekends, said full-year revenue advanced 10 percent with growth in all major markets, outpacing competitors including Mattel Inc. (MAT)
Sales rose to 25.38 billion kroner ($4.6 billion) in 2013, the Billund, Denmark-based building-block maker said in a statement today. Net income increased 9 percent to 6.12 billion kroner.
“In less than 10 years, we have now more than quadrupled our revenue,” Chief Executive Officer Joergen Vig Knudstorp said in a statement. “In 2013 we successfully developed and launched products that children put high on their wish list all over the world.”
The sales advance at the Danish toymaker, whose bricks are featured in “The Lego Movie”, which opened in theaters Feb. 7, compares with an increase of 1 percent to $6.48 billion at Barbie-maker Mattel, based in El Segundo, California. Hasbro Inc. (HAS), based in Pawtucket, Rhode Island, said Feb. 10 that its full-year sales were little changed at $4.08 billion.
It’s a “major challenge” to stay top of mind for children seeking toys and Lego competes with “very strong players,” Knudstorp told reporters in Billund today. “With the level of growth we have right now we need to constantly think of expanding our facilities,” he said.
Lego owner Kjeld Kirk Kristiansen named Knudstorp, 45, CEO after the company posted a loss in 2003, following a period of diversification in the 1990s. Under Knudstorp, the company sold its Legoland theme parks to Merlin Entertainments Plc, cut costs, and refocused on co-branding strategies with successful products like Star Wars, Harry Potter and SpongeBob.
The global toy market declined slightly in value last year, according to Lego, which said it achieved sales growth in all major markets. Lego posted “single-digit” growth in the U.S., U.K. and northern European markets, while achieving “double-digit” expansion in most other markets with very strong growth in Asia.
The Star Wars line and its Duplo sets for toddlers were among Lego’s best-selling products in 2013, according to the company, which has said it sells 34 sets a second during the Christmas season.
The maker of plastic bricks that have pricked the feet of unwary barefoot parents since the late 1940s forecast the global toy market will expand by “low single-digits” in the future and said it plans to outgrow the market and gain share.
“I am expecting that for some of the western developed markets we are now reaching a level of penetration and presence where healthy single-digit growth rates is the name of the game as for many other great brands,” Knudstorp told David Tweed on Bloomberg Television’s The Pulse today. “The company now has such a size that organic growth is more likely to be high single-digit than double-digit.”
Lego, whose name is derived from the Danish words for “play well,” is controlled by the family of carpenter Ole Kirk Kristiansen, who founded the business in 1932.
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