Ten years ago, Lego was barely turning a profit. Today, the brick maker is leaving toy makers Mattel and Hasbro in the dust.
Lego posted stellar profits on Tuesday (March 1) with strong sales for Star Wars sets and the new Dimensions video game, which merges physical brick building with console gaming. The Denmark-based toymaker’s net profits increased 31% to 9.2 billion Danish kronor ($1.34 billion) during 2015, up from 7 billion kronor a year earlier. That’s more than the combined profits of American toymakers Mattel and Hasbro, which are rumored to be considering a merger.
Lego’s sales have grown faster than its rivals in the last two years. Last year Lego’s net revenue rose 25% to 35.8 billion kroner, or roughly $5.2 billion, while Mattel’s sales fell 5% to $5.7 billion, and Hasbro’s grew 4% to $4.45 billion.
The company’s performance in 2015 is a huge triumph when you consider how far the 84-year-old brand has come. Lego went from managing a huge deficit in 2004 to becoming the world’s fifth largest toymaker in terms of sales in 2009. Lego is now vying for first place.
What’s the explanation? New product innovations, partnerships with major brands like Disney, whose properties are among Lego’s best sellers, and projects like The Lego Movie, which helped boost the demand for bricks beginning in 2014. Mattel meanwhile has struggled with falling demand for the Barbie brand and competition from Hasbro, which has attached itself to recent film releases such as Jurassic World, The Avengers: Age of Ultron, and Star Wars: The Force Awakens.