How the company keeps beating the toy industry
Lego has ushered in another year with the help of a secret weapon behind the scenes.
The Danish company reported Tuesday that its revenue for fiscal 2025 rose 12% to 83.5 billion Danish kroner, or $12.9 billion. The company said operating profit rose 18% year on year to 22 billion Danish kroner, or $3.4 billion.
“When we look at the growth area, it’s not a single product or theme, it’s a very broad-based area,” Lego CEO Niels Christiansen told CNBC.
Lego’s consumer sales rose 16%, outpacing the overall toy market’s 7% growth over the same period, the company said. Lego has consistently outperformed the toy industry since the pandemic, growing its market share and space on retail shelves.
The brick manufacturer’s secret: A combination of trend spotting and a streamlined supply chain.
Lego has a hearty range of licensed products, including sets inspired by a wide range of popular movies, TV shows and video games, as well as a number of in-house brands such as floral arrangements, artwork and architectural structures.
Last year, Lego launched its largest portfolio ever, with more than 860 sets hitting shelves, the company said. About half of these were new items.
As Lego expanded its product catalog, it also expanded its consumer base. Christiansen said gateways to the brand, such as its botanical line (plants, bouquets and succulents) and its ongoing partnership with Epic Games, which brings Lego into the digital arena and elements of the popular video game Fortnite into the physical world, are encouraging newcomers to the brick-building arena.
Once there, these customers discover other sets and continue building. Moreover, not only children but also adult builders make up a significant part of Lego’s sales.
Toy experts told CNBC that Lego was ahead of the industry, embracing adults as a major toy consumer long before the industry coined the term “kidult.” Adults who buy toys for themselves account for 25% to 30% of all global toy sales, according to data from Circana.
“We hit the passion points really well with many different types of products and construction methods,” Christiansen said.
One of the latest additions to the company’s portfolio is its partnership with Formula 1 auto racing. Lego has been involved in F1 races since last season; hosts personal events, including functional, life-size cars and handcrafted trophies made from bricks for podium finishers.
Formula 1 cars and a track built with Lego are on display at the 2025 Canadian International Auto Show at the Metro Convention Center in Toronto on February 21, 2025.
Nurfoto | Getty Images
F1 building sets include Duplo sets for preschoolers, traditional sets for casual builders, and Lego Technic sets for more advanced crafters. Additionally, as part of the ongoing relationship between the two brands, Lego team sponsor For an F1 Academy car starting in 2026.
But Lego’s real secret weapon to surpassing the toy industry isn’t so flashy.
brick by brick
Lego has developed an incredibly efficient supply chain that allows it to produce products closer to their final retail outlet.
For example, currently the company’s Mexico-based factory supplies the Americas, while its Hungary factory helps supply parts of Europe, the Middle East and Africa. Lego recently opened a location in Vietnam to serve the Asia-Pacific region and is preparing to open a new facility in Virginia in 2027.
Christiansen said the new US-based factory will help meet the growing demand for products in America.
Lego products are displayed at a Lego store in New York on August 29, 2024.
Spencer Platt | Getty Images
This not only makes the shipping process more efficient and shortens delivery times for fans, but also reduces costs. Lego can customize the products it produces according to regional demand; This means it does not create excess inventory.
Lego can also be more agile than its competitors. Since not all factories are concentrated in a single region, trade disputes or transportation disruptions occur.
“You come out of a year like 2025 and we’ve seen growth beyond our expectations and … what a mountain to climb,” Christiansen said. “On the other hand, we’ve got really strong momentum. It’s continuing throughout the year and into this year. So I think we feel good about growing over 25, maybe we won’t get to the same rate of growth. Our expectation would be high single digits, and that would be great.”
In 2026, Lego will introduce sets based on the likes of Pokémon, “Lord of the Rings” and The Legend of Zelda, and will also launch its new innovation, the Lego Smart Brick. The new high-tech two-by-four Lego brick, part of several new “Star Wars” sets, contains sensors that respond to movement, make sounds and light up when played with.
“So I think there are a lot of different things that need to go well throughout the year,” Christiansen said.
