Read why the sales growth of Lego fades, reports losses
Toymaker Lego saw earnings fall in the year’s first half as the bumper sales growth during the pandemic faded.
The Danish firm performed incredibly well during lockdowns as families stocked up on toys and games to keep them occupied at home.
However, earnings have since slowed, with sales up only 1% in the year’s first half. Returns at the toymaker fell 17.7% to 5.5bn Danish kroner (£634m; $807m).
The firm had pinned its expectancies on China, with its burgeoning middle class keen to buy Western products.
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Lego opened 58 shops in the first half of the year in China, as the planet’s second-largest economy started its big reopening as COVID-related restrictions were lifted across the nation. Nonetheless, sales in the country have been weaker than anticipated.
“The return to more normal conditions, where people go into stores and spend again, has been slower in China than we anticipated,” Niels Christiansen, chief executive officer of Lego, stated.
Despite the lagging start, China stays a “long-term growth” target for Lego, with more shop openings in the pipeline. The firm already has large flagship shops in Shanghai and Beijing.
Lego is making two new factories in Vietnam and the United States that will open in 2024 and 2025 and expand its current plants worldwide.
