Lego looks to build on 2022 sales growth with more China stores

Toymaker Lego said store openings in China and strong demand in Western Europe and the Americas had delivered 17% sales growth in 2022, adding that it expects to outpace the market this year.

The family-owned company known for its colourful plastic bricks said sales rose to 64.6 billion Danish crowns ($9.25 billion) last year, when it opened 155 new stores, bringing the total number of Lego shops globally to more than 900.

"We have really good momentum, and I think it will continue in 2023," Lego Chief Executive Niels Christiansen told Reuters.

Lego plans to open another 145 stores this year, mostly in China, which Christiansen said in an interview he expects will help it to grow sales by a high single-digit percentage.

Top sellers in 2022 included Lego's Star Wars and Harry Potter building sets, and its City and Technic ranges.

The Danish company, which employs more than 27,000 people globally, saw sales spike both during the pandemic when many people stayed home and after lockdowns were lifted.

"After a few extraordinary years we may see a return to more normal growth," Christiansen said. "But we believe we can continue to outpace the market."

'EXTRA COSTS'

Lego's operating profit of 17.9 billion crowns was up 5% from a year earlier, after 32% growth the previous year.

Christiansen said it had raised prices on some products in September, but by less than increases in its input costs.

"High growth in sales has helped us compensate for those extra costs on freight, energy and raw materials," he said.

The CEO said that Lego has no immediate plans to raise prices and he was optimistic that costs of freight and raw materials were coming down.

As part of its strategy of placing production close to its key markets, Lego plans to begin operating new factories in Vietnam and Virginia, U.S. in 2024 and 2025, respectively.

($1 = 6.9859 Danish crowns)