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NY Post

The Odd Reason Lego Had a Decline in Profits for the First Half of the Year

Sep 7, 2016  •  Post A Comment

The toymaker Lego reported a decline in revenue growth and profits for the first half of 2016, for an ironic reason: Demand for the Danish company’s toy bricks is so high in North America that the company needs time to add production capacity.

“The company, which has become the world’s most profitable toymaker ahead of Barbie Doll maker Mattel, saw revenue grow 11 percent in the six months to $2.35 billion, while operating profit was up 1 percent at 4.66 billion. Net profit fell nearly 2 percent to $524 million,” The New York Post reports.

The report adds: “Lego has increased sales by an average of more than 15 percent per year in the last 12 years, with a 25 percent growth rate in 2015. But while sales in Asia and Europe, its most mature market, grew by double digits in the first half of 2016 there was no growth in the Americas.”

That’s because Lego couldn’t keep up with demand in North America, so it cut down its marketing, the story reports, citing comments by Chief Financial Officer John Goodwin.

Said Goodwin: “We are working very closely with our retail partners to ensure that as we go into the important holiday season, the back half of 2016, that we’ve got all of the levers pulled to get back on the growth trajectory.”

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