LEGO’s Business Is a Brick Wall

By: Kaydee Ambas · March 08, 2023 · Reading Time: 3 minutes

Only the Best

LEGO’s near-century slogan still rings true today: only the best is good enough.

Kids these days have access to unprecedented amounts of entertainment. But even with the skyrocketing popularity of gaming consoles and smartphones and the prolonged success of classics like Monopoly and Barbie, LEGO still captures the imaginations of kids around the globe.

Despite a tumultuous year, Lego’s 2022 sales still rose 17% year-over-year to $9.3 billion, while net profit jumped 4%. This leaves LEGO leading the toy business — and its competitors Hasbro (HAS) and Mattel (MAT) taking the fiscal equivalent of a loose brick to the foot.

Solid as Brick

LEGO was able to achieve this earnings growth despite a once-in-a-lifetime pandemic, supply-chain tumult, and soaring inflation.

LEGO’s success over the years boils down to three major areas: tapping into new markets, keeping new generations of fans engaged, and piggybacking off the success of other brands.

In particular, LEGO has successfully leaned on partnerships with film franchises like Disney’s (DIS) Star Wars and Warner Bros’ (WBD) Harry Potter to remain relevant, releasing popular lines of themed sets. On top of that, it has developed a product ecosystem of video games and even movies, helping to keep fans of all ages engaged.

Staying Hip

LEGO was founded in 1932. Its iconic buildable blocks haven’t changed much at all over the decades.

LEGO’s ongoing popularity can be in part explained by its consistency. It appeals to fans who grew up with the toy, while also keeping up with trends to stay top-of-mind for new generations. Looking forward, LEGO has even partnered with Epic Games to build a child-friendly version of the metaverse.

Fans can rejoice in knowing LEGO’s yellow brick road only seems to stretch further as time goes on. And parents can rejoice in having a continued source of entertainment for their kids — even if it means navigating a living room minefield.

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