Lego’s sales rise 13% in the first half, defying the toy industry’s slump

The trend: Amid a challenging landscape for the toy industry in the US and abroad, Lego keeps gaining market share brick by brick.

• Lego's volumes were flat last year and consumers traded down to more affordable Lego sets; this year, volumes have increased, CEO Niels Christiansen told CNBC.
• Lego continues to build on its pandemic-era boom thanks to its diverse array of offerings that appeal to consumers of all ages.

The numbers:

• Lego’s revenues rose 13% year over year (YoY) in the first half to 31 billion Danish kroner ($4.62 billion).
• Consumer sales grew 14%, which was a dramatic contrast with the broader toy industry. For example, in the US, toy industry sales fell 0.4% in the first half, per Circana.
• Net profit increased 16% to 6.0 billion Danish kroner ($890 million).

Our take: Lego’s impressive gains stem from a strong three-pronged growth model:

• Offer a large, diverse portfolio. In the first half alone, Lego launched around 300 new sets to ensure its selection is dynamic and appeals to a broad swath of consumers.
• Lean on intellectual property: Many of its best-selling sets are tied to licensed themes such as Star Wars, Harry Potter, as well as via its partnership with Epic Games’ Fortnite.
• Keep experimenting. After partnering with Epic Games to launch Lego Fortnite, the company expanded play offerings with the launch of LEGO Islands. It will bridge digital and physical play with the release of the first LEGO Fortnite sets in October.