There’s an onerous tax that parents the world over pay for their kids’ happiness — one that originates in Billund, Denmark.
Lego’s parent company reported its 2022 earnings on Tuesday, revealing a 17% rise in revenue and a 4% rise in profits. CEO Niels Christiansen said despite consumers feeling the pinch, there was plenty of demand for big, complicated sets. Turns out affordable luxury looks like a Lego Death Star.
Playtime Is Over (For Everyone Else)
There appear to have been a few key elements building up Lego’s fortunes last year, most notably an expanded physical presence in China. Lego opened 155 brick-and-mortar shops (with extra bricks) last year, and half of them were in China. Christiansen said the foot traffic to physical shops had even begun to exceed 2019 levels.
While 4% profit growth might not seem huge — and way down from the 31% profit growth Lego chalked up for 2021 — it’s still an impressive achievement, especially when you look at its rivals:
- Barbie maker Mattel came in below expectations with flat sales for 2022, and the CEO said this was because “the macro-economic environment was more challenging than anticipated.”
- Hasbro, which is behind a broad swathe of brands including Monopoly, Play-Doh, and Dungeons & Dragons, reported a 9% drop in revenue for 2022.
Collecting Dust: Toys on the more collectible end of the spectrum — i.e. ones you don’t actually get to play with — have also fallen on hard times. Funko Pop, the company that makes pop-culture icons from Batman to Bob Ross into bobble-head toys, announced on Sunday it’s got a crippling surplus inventory problem. The company had to rent extra warehouse space last year to store the pile-up of dolls and now plans to throw $30 to $36 million worth of its figurines in the garbage. Think Toy Story 3 without the deus ex machina…