LEGO delivers strong growth in 2022 and invests in the future

Nice, so profits and revenue continue to rise while the new pricing is out of sight. Really makes one feel appreciated as a longtime customer.

Thank God, LEGO raised their prices significantly last year. It would have been terrible if profits would only had been 10%. Can you imagine all the suffering? LEGO stores would close and low level employees would have to live on the streets to make up for losses while upper management and investors would not be able to afford their new sports car with all options, but had to make do without the high end leather seats…

@Mr_Hankey said:
"Thank God, LEGO raised their prices significantly last year. It would have been terrible if profits would only had been 10%. Can you imagine all the suffering? LEGO stores would close and low level employees would have to live on the streets to make up for losses while upper management and investors would not be able to afford their new sports car with all options, but had to make do without the high end leather seats…"

Oh nooo! What's a sports car without seats made from leather of an endangered species? That would truly be horrible! Those poor people!

Cue 300 posts from people who have no clue about running a major international business complaining because their toys went up by a few quid

They're a global company, I appreciate the need to be profitable. But it's really disheartening to see them squeeze as much as they can out of their valued customers and then gloat about how well they're doing it. I know this is how the world works, I accept it but I don't have to like it. And yes, they're toys, people don't have to buy them. I don't buy as much as I did for that reason.

If they were raising their prices because they were paying their employees more to help them through the financial challenges then I'd have no issue. But they aren't raising prices to match the amount that costs have increased. Clearly, because their profit margin has increased.

I'm not angry, I'm just disappointed.

@Mr_Hankey said:
"Thank God, LEGO raised their prices significantly last year. It would have been terrible if profits would only had been 10%. Can you imagine all the suffering? LEGO stores would close and low level employees would have to live on the streets to make up for losses while upper management and investors would not be able to afford their new sports car with all options, but had to make do without the high end leather seats…"

Revenue (17% growth) is not the same as profit (4% growth).

Glad to see that our favorite company is doing well! It's also cool to see them investing in social responsibility efforts... proof that companies can do well AND do good :)

"Christiansen said: “We are grateful that our financial momentum makes it possible to continue to support children in need and bring more Learning through Play opportunities to children everywhere.”"

^ such a cool sentiment to hear expressed in a financial report

@EvilTwin said:
"Cue 300 posts from people who have no clue about running a major international business complaining because their toys went up by a few quid"

More than a few quid, lol!
Opinions don’t necessarily relate to an individuals ability to run a business. Maybe customer retention comes into it too

@Huw said:
" @Crushmaster said:
"Nice, so profits and revenue continue to rise while the new pricing is out of sight. Really makes one feel appreciated as a longtime customer."

Would you prefer them to drop, risking the long-term future of the company? "

Yes.

I’m glad Lego is doing so well, but hope quality control is not going to slip any further (Rivendell instructions I am looking at you, multiple steps out of synch with build images)

I wonder how much more sets were sold or whether the increase only comes from heavily increased prices.

@MegaLucario said:
" @Huw said:
" @Crushmaster said:
"Nice, so profits and revenue continue to rise while the new pricing is out of sight. Really makes one feel appreciated as a longtime customer."

Would you prefer them to drop, risking the long-term future of the company? "

Yes."
Same here. Especially since LEGO's profit margins are simply insane.
Keeping prices at reasonable levels would not risk the long-term future of the company any more than customer dissatisfaction because of price gouging!

@EvilTwin said:
"Cue 300 posts from people who have no clue about running a major international business complaining because their toys went up by a few quid"

Out of curiosity, how many ‘major international businesses’ have you run?

As usual there are a lot of comments from people who think that a commercial business is actually a charity. Do all of the commentators work for the public sector?

No one likes price rises, but there seems to be an entitlement that Lego sell sets cheaply because fans want them. The fact that so many sets are on offer so much shows that the prices don't do well in the market, and that D2C business model is easily undercut by other retailers.

I would imagine that the results for the next year won't look so good as Lego are now selling a lot of duff sets, too many are being reduced very quickly and shows that they're producing a lot of stuff fans don't want, a lot of time is being wasted on the development and advertising (can't imagine Henry and Rashford were cheap to promote the Table Football set).

Lego fans: "These price rises are awful, I'm boycotting Lego now. Lego is too expensive".

Lego: "Here's the new Rivendell Set".

Boycotting Lego fans: "Day One purchase, no GWP or discounts necessary, I'm buying it at midnight".

When it comes to changes @ Lego, I feel like a see a new tendency: Lego used to be a fairly priced (I think) and rarely discounted product.
Could it be that they are slowly changing into a more highly priced and more often discounted product?

Because allthough prices have grown, I feel on all levels we also are getting steeper Lego discounts... (or more GWP stacking, or double VIP or ...)

@Huw said:
" @Crushmaster said:
"Nice, so profits and revenue continue to rise while the new pricing is out of sight. Really makes one feel appreciated as a longtime customer."

Would you prefer them to drop, risking the long-term future of the company? "

With over €1.8 billion net profit, and a net profit margin of 20%, there is no danger to this company at all. Stop feeling sorry for large corporations.

@SwingTop said:
" @Huw said:
" @Crushmaster said:
"Nice, so profits and revenue continue to rise while the new pricing is out of sight. Really makes one feel appreciated as a longtime customer."

Would you prefer them to drop, risking the long-term future of the company? "

Stop feeling sorry for large corporations."

Bricksets business depends on the Lego company's well-being. Without Lego's constant production there would be no traffic on this website. It would be stupid for HUW not to "feel" about the Lego business.

Well, at least LEGO does well and can give me more mechs! :D

@Crushmaster said:
"Nice, so profits and revenue continue to rise while the new pricing is out of sight. Really makes one feel appreciated as a longtime customer."

You need to understand how business works before making comments like that.

@Mr_Hankey said:
"upper management and investors would not be able to afford their new sports car with all options, but had to make do without the high end leather seats…"

I’ll happily drive down the LEGO parking lot with a camera on for you, so you can point at all these sporty Skoda Fabias and Toyota Corollas you are talking about.

Everyone moaning about the small rise in profit, sales figure is irrelevant, profit and cash are king. Companies have to look to the longer term, Don't get me wrong, the prices rises hurt, but if they did not do this then they could hit rocky times ahead. I have bought much less Lego last year and chosen wisely what I have bought, that's my choice, I don't main about the prices, If I don't like it the price I don't buy it. The moaners will need to find a different toy to buy that has not gone up in price (good luck with that)

I'm glad my favourite toy company is doing well.
When I read the sentence "The company reached more children than ever before with its large and diverse portfolio," I inserted "and adults." :)
Once again, I hope The Lego Group rewards its employees monetarily for their role in the company's accomplishments.
Thanks for the report, Huw!

@AustinPowers said:
" @MegaLucario said:
" @Huw said:
" @Crushmaster said:
"Nice, so profits and revenue continue to rise while the new pricing is out of sight. Really makes one feel appreciated as a longtime customer."

Would you prefer them to drop, risking the long-term future of the company? "

Yes."
Same here. Especially since LEGO's profit margins are simply insane.
Keeping prices at reasonable levels would not risk the long-term future of the company any more than customer dissatisfaction because of price gouging! "

Exactly. I certainly don’t begrudge Lego for making money - a business has to make money to survive. And I don’t want Brickset to go anywhere, either. What I’m not here for is the idea that Lego always needs to make more money than they did last year. That’s simply not true, and it’s what I see as the driver for a lot of the unfortunate price increases.

And yet TLG still won't reinstate B-models in larger Technic sets due to "lack of resources".

What is it with all these companies always wanting the profits to grow grow grow? This is the result of the anglosaxon view on economy.

And what is the effect of price increase of sets? Maybe this has caused Lego to sell less sets. If revenue increased with 17% but the prices went up with 20% on average that is basically a 3% loss in revenue.

Ah yes, poor LEGO, they covered the ever-increasing expenses and investments while still GROWING their profits.
But lower prices would sink the company for sure.

@beyoda said:
" @AustinPowers said:
" @MegaLucario said:
" @Huw said:
" @Crushmaster said:
"Nice, so profits and revenue continue to rise while the new pricing is out of sight. Really makes one feel appreciated as a longtime customer."

Would you prefer them to drop, risking the long-term future of the company? "

Yes."
Same here. Especially since LEGO's profit margins are simply insane.
Keeping prices at reasonable levels would not risk the long-term future of the company any more than customer dissatisfaction because of price gouging! "

Exactly. I certainly don’t begrudge Lego for making money - a business has to make money to survive. And I don’t want Brickset to go anywhere, either. What I’m not here for is the idea that Lego always needs to make more money than they did last year. That’s simply not true, and it’s what I see as the driver for a lot of the unfortunate price increases."

Sadly a lot of large companies operate this way - if revenue isn't higher this year than it was the last, it's seen as a failure, and if they built up plans based on higher revenue, it would lead to cuts/layoffs/contractions. Even if the absolute revenue numbers are still extremely high, if they're under expectations, it'll cause problems. There's also the factor that the companies plan to project higher revenue each year since it would attract more investment or business deals, so it's all a giant toxic loop.

@Huw said:
" @Crushmaster said:
"Nice, so profits and revenue continue to rise while the new pricing is out of sight. Really makes one feel appreciated as a longtime customer."

Would you prefer them to drop, risking the long-term future of the company? "

Seeing what great themes came out as they innovated to avoid bankruptcy in early 00s... yes. That would be preferable to the complacency and safe play with licensed IPs we have now.

I don't really care about modern LEGO. They don't make things I'm interested in anymore. I'm here mostly for nostalgia for the old sets and a glimmer of hope that they return to what made them special to me.

17.0 -> 17.9 +5% yearly operating profit growth
[10.8 -> 17.9 +65% opg in five years (not misleading CAGR)]

Cool!
Good for TLG, good for Brickset, good for Rebrickable... good for me.

But... BUT! Don't you dare to use "lack of resources" to excuse poor quality instructions, different shades in same color, color mismatch in transclear cockpits, etc.

Oh! And if you wanna go green, try to reduce cardboard boxes size to the space you need to store the bricks inside, I have enough air at home.

*** Edit FYI:
17.9 bDKK are 2.56 billion USD profit. Think about that!

I’m afraid I don’t find the excuses based on “capitalism” to be very convincing. Yes, any company would hope to make a continuous annual profit (though given that it is privately-owned, there is nowhere near the same pressure as there would be on a publically-traded company), but many companies have reported drops in profits, or even losses, when associated with internal investment or rising external costs. There would have been little shame in doing so.

Prices rose purely because Lego was confident it could squeeze more money out of its customers, even in difficult economic circumstances. There is nothing inherently wrong about this, but I think it could prove to be unwise. Lego is the very definition of a luxury item, and while the company may be happy to focus its sales on the most well-off, that group has been hit more and more by wage stagnation and cost of living rises. I know I’ve had to be a lot more careful about my expenditure and I imagine many others will have been in the same position.

Bare in mind that there have been all sorts of “truths” about capitalism that were assumed to be true, right up until the point they were proven to wrong (basically every market crash ever). I don’t think that received wisdom is enough to justify this as a long term strategy for Lego. Ultimately, Lego’s USP is supposed to be that it’s not like other companies. A brand image can only be pushed so far, and peoples’ loyalty shouldnt be presumed to continue unconditionally.

Would it have really hurt Lego to take the moral high ground and have (more or less) frozen costs this year in recognition of their customers and as a longer term investment in customer goodwill and loyalty (which would almost certainly have paid them back with dividends in the long term)? Remember, for there to be a ready supply of AFOLs in the future, they do (generally) need to have been KFOLs first!

@thor96 said:
" @SwingTop said:
" @Huw said:
" @Crushmaster said:
"Nice, so profits and revenue continue to rise while the new pricing is out of sight. Really makes one feel appreciated as a longtime customer."

Would you prefer them to drop, risking the long-term future of the company? "

Stop feeling sorry for large corporations."

Bricksets business depends on the Lego company's well-being. Without Lego's constant production there would be no traffic on this website. It would be stupid for HUW not to "feel" about the Lego business.
"

There goes objectivity and critical analysis then…

Customers should be annoyed. Lego is now a luxury product, and manufacturer issues, continued red brown element fragility and endless sticker sheets do little to justify the increase, on a surface level.

What’s hilarious here is I’m seeing the same ultra-conservative pro-business posters whining about how LEGO is too profitable and doesn’t really care about their fans.

The same crowd applauding Elon Musk and perfectly happy with for-profit hospitals cannot possibly display more cognitive dissonance. Watch as they square the circle around how glorious unfettered capitalism shouldn’t be applied to the most benign example of a product subject to price increases.

And to add insult to injury, it doesn’t play into their woke-ism will lead to worse financial results fantasy. How will they fall asleep tonight?

The whole report simply leaves a bad aftertaste.
One the one hand the company raises prices drastically across the board, citing the need to do so, on the other hand they post rising billion-dollar profits every year.
I guess the boss needs some more Ferraris for his collection.
Seriously, that kind of attitude can be the beginning of one's downfall.
A good company should always put its customers before its profits.
There's nothing wrong with profits per se, after all a company of course needs to stay healthy. But there's a difference between healthy profits and over the top profits by quality reduction and price gouging.

@Bricklestick said:
"I’m afraid I don’t find the excuses based on “capitalism” to be very convincing. Yes, any company would hope to make a continuous annual profit (though given that it is privately-owned, there is nowhere near the same pressure as there would be on a publically-traded company), but many companies have reported drops in profits, or even losses, when associated with internal investment or rising external costs. There would have been little shame in doing so.

Prices rose purely because Lego was confident it could squeeze more money out of its customers, even in difficult economic circumstances. There is nothing inherently wrong about this, but I think it could prove to be unwise. Lego is the very definition of a luxury item, and while the company may be happy to focus its sales on the most well-off, that group has been hit more and more by wage stagnation and cost of living rises. I know I’ve had to be a lot more careful about my expenditure and I imagine many others will have been in the same position.

Bare in mind that there have been all sorts of “truths” about capitalism that were assumed to be true, right up until the point they were proven to wrong (basically every market crash ever). I don’t think that received wisdom is enough to justify this as a long term strategy for Lego. Ultimately, Lego’s USP is supposed to be that it’s not like other companies. A brand image can only be pushed so far, and peoples’ loyalty shouldnt be presumed to continue unconditionally.

Would it have really hurt Lego to take the moral high ground and have (more or less) frozen costs this year in recognition of their customers and as a longer term investment in customer goodwill and loyalty (which would almost certainly have paid them back with dividends in the long term)? Remember, for there to be a ready supply of AFOLs in the future, they do (generally) need to have been KFOLs first!"

The point you all continually miss is that most of their squeezing on prices has been aimed at adult collectors while they’ve kept price increases lower overall for themes aimed at kids.

Lots of wonderful $10 sets, continual discounts on evergreen speed champions and ninjago themes - Star Wars and mega sets for grownups are absorbing the major sticker shock where collectors and especially resellers are continuing to prove the strategy correct.

@MrKoshka said:
"Side note - if a group of people called themselves my fan, but hated what I do now, and didn’t buy any of it - guess what, I wouldn’t care about them either. Especially when the rest of the world is happy with me. Just a friendly reminder that none of us want you miserable lot as a part of our community. Maybe get into animal taxidermy and take your negative attitudes and backwards social views over to one of their websites instead?"

Someone needs a coffee!

@MegaBlocks said:
"Lego fans: "These price rises are awful, I'm boycotting Lego now. Lego is too expensive".

Lego: "Here's the new Rivendell Set".

Boycotting Lego fans: "Day One purchase, no GWP or discounts necessary, I'm buying it at midnight"."

Shhhhh! Quit telling fans that they actually have to follow through on complaints before they make a difference!

@MrKoshka said:
"What’s hilarious here is I’m seeing the same ultra-conservative pro-business posters whining about how LEGO is too profitable and doesn’t really care about their fans.

The same crowd applauding Elon Musk and perfectly happy with for-profit hospitals cannot possibly display more cognitive dissonance. Watch as they square the circle around how glorious unfettered capitalism shouldn’t be applied to the most benign example of a product subject to price increases.

And to add insult to injury, it doesn’t play into their woke-ism will lead to worse financial results fantasy. How will they fall asleep tonight?
"

Not sure who you’re referring to there, but you manage to contradict yourself within several sentences. I don’t know how you infer that people are ultra-conservative based upon their postings about a plastic toy. Even were that to be true, I don’t think there is much overlap between ultra-conservative and “woke”.

As for the rest of your rant, it reads like a ChatGPT glitch.

I have no issue with price increases if it keeps them profitable and in business as I like buying the products. My biggest frustration is the assumption that everyone over 18 is only interested in collosal expensive sets with thousands of pieces and huge price tags.

Can we please get some small 18+ sets that cost less than £50 but are nice display pieces. Not everyone has room for a replica Hogwarts or a huge colleseum etc

Just because I'm an adult doesn't mean I have hundreds of pounds of disposable income every month

Comic Book Guy:
Last night's Itchy & Scratchy was, without a doubt, the worst episode ever. Rest assured that I was on internet within minutes registering my disgust throughout the world.

Bart Simpson:
Hey, I know it wasn't great, but what right do you have to complain?

Comic Book Guy:
As a loyal viewer, I feel they owe me.

Bart Simpson:
What? They've given you thousands of hours of entertainment for free. What could they possibly owe you? I mean, if anything, you owe them.

Comic Book Guy:
Worst episode ever.

I am glad that LEGO is doing good. I am not sure how wise it is in the long run to put so many investments in China though- being a western company. There is a big risk that they will all be lost in the coming years.

Company whose products I enjoy are doing well - great news.

1. Lego needs to make a profit to invest in future products and themes, manufacturing processes and in-house talent. The by-product of which is that we get cool new sets to build.
2. No-one is forcing anyone to buy all or even any of these new products. If you find yourself unable to budget for the really expensive sets, then buy the smaller ones. They are still Lego sets. If Lego produce sets or even entire themes you're not interested in, then that's fine as well. Obviously there are enough people out there that do like them to allow Lego to make them. See point 1.
3. If you're the kind of person who likes buying on discount, Lego has no business trying to woo you. If you only care about the minimum you can pay for something, that's always what you will care about. Lego wants to make a profit - trying to appeal to that kind of consumer only results in "Yes, I like it - but I'll only buy it if it's cheaper" and where's the profit margin in that? It's a waste of their effort and your time.
4. Every single person on here is making anecdotal accounts of what the company is doing, should be doing or wishes they would do. That's fine, but don't pretend they are facts, they are just opinions.

@maffyd said:
"1. Lego needs to make a profit to invest in future products and themes, manufacturing processes and in-house talent. The by-product of which is that we get cool new sets to build.
2. No-one is forcing anyone to buy all or even any of these new products. If you find yourself unable to budget for the really expensive sets, then buy the smaller ones. They are still Lego sets. If Lego produce sets or even entire themes you're not interested in, then that's fine as well. Obviously there are enough people out there that do like them to allow Lego to make them. See point 1.
3. If you're the kind of person who likes buying on discount, Lego has no business trying to woo you. If you only care about the minimum you can pay for something, that's always what you will care about. Lego wants to make a profit - trying to appeal to that kind of consumer only results in "Yes, I like it - but I'll only buy it if it's cheaper" and where's the profit margin in that? It's a waste of their effort and your time.
4. Every single person on here is making anecdotal accounts of what the company is doing, should be doing or wishes they would do. That's fine, but don't pretend they are facts, they are just opinions."

Lego will thank you for defending their business practices. In my opinion, Lego is a greedy corporation (not unlike any other corporation under the fatally flawed world of capitalism) who do not care about their customers other than what is in their wallets and where they spend it.

I'm seeing some very different things in the numbers than a lot of the negative posters here. Here are some things I've noted, mostof which tend to go against typical Western busines practice in the business environment:

- While there is an increase in revenue and total profit, profit margin is down.
- Current & future investments are up
- Employee numbers are up. Even though most of the employment increase seems to be im lower paid areas, mean employee pay is flat
- Senior management took a salary freeze
- Dividend payment is being cut
- Cost of production is up 20% (raw materials 24%, licensing 22%)

What I see is a company trying to sustain its business while trying to balance the needs of a wide range of stakeholders (including, but not limited to, current and future customers).

I think it's good they are doing well as a company, I see nothing inherently bad in either profits or price increases, and it's good to see such a sustained growth in demand for the products.

Don’t worry, we’re keeping track of everyone here that complains about the high prices but then says they’ll be buying the next big set on day one.

Complain all you want and talk about how dissatisfied if you are, but none of it will matter if people keep buying at these “insane prices”. Mustn’t be too insane…

The report is quite high level, with static/average data and processed by global advisory corporation to look as good a possible,so there needs to be lot of caution processing it. But even with the data inside the report, beyond the title or one page poster (where most people stop reading) shows that it is not that great as some people here claim.

- the increase in revenue is 17%, but the profits 'rose' only 5% which means the second did not follow the first linearly
- this means the profit margin (revenue/profit) actually dropped it is around 27% which is lowest from all the 5 years in that report, down 1/10th from last year.
- while there is enough buffer (to keep commenters red eyed) this normally is quite a warning to look for trends
- also the fact that both production and sales+logistics costs have increased by 20-27% while revenue 'just' 17% means the rise of revenue cannot keep up with rise of (some) costs whatever the reason (fixed/dynamic)
- For example even "Raw materials and consumables used" which have increased by 24,5% do not have to linearly follow production increase so with any drop of sales/production the ratio would worsen
So generally the costs have increased proportionally more than revenue and if this is not just a status (of current times), but a trend then even the generous profit margin buffer won't be enough without some serious cost cutting.

Also it seems that the employee count rose 17% but wages just 11-12%, that looks kind of strange (although one does not know how much movement from agency work to fulltime or vice versa is covered in cost).

Be happy that you can buy Lego and enjoy building with your kids or by yourself. Nuff said!

@Samurai_BriX said:
"Lego will thank you for defending their business practices. In my opinion, Lego is a greedy corporation (not unlike any other corporation under the fatally flawed world of capitalism) who do not care about their customers other than what is in their wallets and where they spend it. "

Lego does not need me defending them. They can do what they like. No-one can really take a stance other than "I like it"/"I don't like it". I'm surprised you're taking a view at all if you're so opposed to capitalism - just buy used Lego from charity shops, I suppose. You certainly don't need to give your money to Lego, and I'm not asking that you do. But it's rather simplistic to state unequivocally: "Lego is greedy. Capitalism bad. My feelings are hurt."

@papluh said:
"- the increase in revenue is 17%, but the profits 'rose' only 5% which means the second did not follow the first linearly
- this means the profit margin (revenue/profit) actually dropped it is around 27% which is lowest from all the 5 years in that report, down 1/10th from last year.
- while there is enough buffer (to keep commenters red eyed) this normally is quite a warning to look for trends
- also the fact that both production and sales+logistics costs have increased by 20-27% while revenue 'just' 17% means the rise of revenue cannot keep up with rise of (some) costs whatever the reason (fixed/dynamic)
- For example even "Raw materials and consumables used" which have increased by 24,5% do not have to linearly follow production increase so with any drop of sales/production the ratio would worsen
So generally the costs have increased proportionally more than revenue and if this is not just a status (of current times), but a trend then even the generous profit margin buffer won't be enough without some serious cost cutting. "

Net profit margin is 20% (net profit/revenue), which is very healthy for any given company, especially given the inflation that took place recently. You make it look like they're in danger.

I can tell you the real warning for companies like LEGO: if they do not actively match prices to an environment in which customers are squeezed and have less and less discretionary spending room than ever, and keep raising prices further, they will turn their toy business into a high-margin unobtainable product line that is only for the elite. Given the rather ridiculous "LEGO investment" market, I already feel that they're not shy to go that way. I believe this will lead to the demise of the company. However, given that LEGO came back rather well from their last big dip, dare I say perhaps they need another? Let your wallet do the talking, don't buy overpriced sets.

I can't vouch for the workings of billion-dollar companies, but the price increases suck when LEGO is already an elitist hobby. $20 Battle Packs and $16 Microfighters for the "cheap" starter sets are absurd. They suck even more when they make so many giant sets ($400+ Rivendell, Ninjago City Markets, a Batcave, a Disney castle, and a giant Marvel set! Just this year!) and the smaller ones are overpriced and often very boring (Compare the new $50 Hulkbuster to the $30 ones). What really stings the most though, in my opinion, is the death of the play features. The back of the boxes for the new Star Wars and Marvel sets are so dreadfully sparse outside of stud shooters that it's genuinely mind-boggling that children buy them. As a kid, I really liked how 6869 Quinjet Aerial Battle had so many cool features. Flick fire missiles! A drone that drops down! A comic book! And then 76248 is like... you get two sets of stickers... and you can put Iron Man on the wing... yay?

It's like I'm buying a more expensive product, but I'm not buying a better product.

@MrKoshka said:
"What’s hilarious here is I’m seeing the same ultra-conservative pro-business posters whining about how LEGO is too profitable and doesn’t really care about their fans.

The same crowd applauding Elon Musk and perfectly happy with for-profit hospitals cannot possibly display more cognitive dissonance. Watch as they square the circle around how glorious unfettered capitalism shouldn’t be applied to the most benign example of a product subject to price increases.

And to add insult to injury, it doesn’t play into their woke-ism will lead to worse financial results fantasy. How will they fall asleep tonight?"
Typical troll comment. Hate inciting, mostly beside the point, and totally without merit.
How one can deduct from people complaining about massive LEGO price increases that they would also welcome capitalism is beyond me (let alone how woke-ism should have anything to do with it). I have yet to meet one person who is pro profit-oriented hosptals for example. Those hospitals are the worst ever quality wise, as personal experience has sadly shown.
Or those Elon Musk evangelists. Even though I drive a Tesla I find his personal conduct highly questionable. There's a difference between the product and the brand you know. Like with LEGO. I very much like building with the bricks even though I hate the current company behind them guts. LEGO has come along way from the small and sympathetic family company of decades ago. By now it's just a greedy corporate behemoth like any other.

Speaking of which, the massive price increases have been across the board, not just on AFOL oriented themes. Actually, looking at prices for kids oriented themes like City one could even deduce that those take the brunt of the increases. Many City sets by now are the most expensive per content of the entire LEGO product lineup. Just because prices stay at a certain level like 10/20/50 Dollars/Euro doesn't mean prices haven't increased drastically. Just look at the piece count and volume of content going down, or the declining quality. The pieces from my childhood collection of the Seventies and Eighties have better colour consistency for example than those from my current sets. Same with print and sticker quality, quality of the transparent pieces, or the paper of the instruction manuals, which nowadays often come creased or torn, something I never experienced up to about four/five years ago.

BTW, "capitalism" =/= "greed." Seriously, people.

Capitalism is simply a market system in which people buy and sell for their own purposes, often for the purpose of increasing wealth. (This can be mutually beneficial; "increase your wealth" can benefit both the purchaser and the seller. You want to increase your wealth of Lego, yes?)

It's a tool. People can use it for good or for ill. Some people use their wealth greedily, but others pour their money back into charity or to benefit their families. (I sold some Lego yesterday and used the money to buy my wife a present. Guess what: I'm a capitalist.)

If you think there's greed and exploitation and other sins associated with the Lego corporation and Disney and anyon else associated, consider your own role in allowing that market to flourish. Emphasis on each word here: You. Don't. Have. To. Buy. Any. Of. It.

(You: "But I have FOMO.") Me: That is *totally* on you.

Honestly 4% profit isn't even that much considering how big of a company Lego is.

Let's just accept the fact that 21339 pretty much saved the business

@ResIpsaLoquitur said:
"You. Don't. Have. To. Buy. Any. Of. It."
That has been my motto in terms of LEGO ever more often recently.
Actually I now suffer mostly from FONKWTDWATS, aka Fear of not knowing what to do with all that stuff.

I had a list of sets I was interested in (LEGO and alternatives), and kept adding to this list over the years. One day I realized that the list was getting longer and longer and I would never be able to clear it.
Do you know what I did with that list a couple of days ago? I threw it away. Feels so liberating.

Now I simply use the pieces in my collection to build whatever I want. Kind of how I did as a kid, only on a much grander scale, since as a kid I would never have dreamed that one day I would have close to a million bricks and pieces, from close to twenty different manufacturers no less.

And if an interesting set happens to come along at a nice discount I might just spontaneously decide to get it - or not.

@Mr_Hankey said:
"Thank God, LEGO raised their prices significantly last year. It would have been terrible if profits would only had been 10%. Can you imagine all the suffering? LEGO stores would close and low level employees would have to live on the streets to make up for losses while upper management and investors would not be able to afford their new sports car with all options, but had to make do without the high end leather seats…"

Someone doesn’t understand the difference between revenue and profit.

@empire0 said:
"Honestly 4% profit isn't even that much considering how big of a company Lego is.

Let's just accept the fact that 21339 pretty much saved the business"

4% rise in profit, not 4% total.

I am just shaking my head at those accusing a toy/hobby company of "price gouging." All I hear is "wahh, its not fair!"

And remember kiddies... Lego is a new toy every day.

It's only expensive for greedy adults!

@ACubeInABox said:
"
It's like I'm buying a more expensive product, but I'm not buying a better product. "

Yet you’re still buying.

@AustinPowers said:
" @ResIpsaLoquitur said:
"You. Don't. Have. To. Buy. Any. Of. It."
That has been my motto in terms of LEGO ever more often recently.
Actually I now suffer mostly from FONKWTDWATS, aka Fear of not knowing what to do with all that stuff.

I had a list of sets I was interested in (LEGO and alternatives), and kept adding to this list over the years. One day I realized that the list was getting longer and longer and I would never be able to clear it.
Do you know what I did with that list a couple of days ago? I threw it away. Feels so liberating.

Now I simply use the pieces in my collection to build whatever I want. Kind of how I did as a kid, only on a much grander scale, since as a kid I would never have dreamed that one day I would have close to a million bricks and pieces, from close to twenty different manufacturers no less.

And if an interesting set happens to come along at a nice discount I might just spontaneously decide to get it - or not."

See, this is a healthy attitude.

I currently have a bin of disassembled sets that I really need to go through and see what's worth keeping. The fact that they're in the bin tells me I need them less than I think I do.

I'm at the point where I've realized that I enjoy minifigures far more than I do buckets and buckets of large builds. I have some MF displays and a few key builds that are personal favorites and there should be a point of contentment.

Billions and billions and they still can't figure out how to decently print skin tones on dark plastic, or match sticker colours to brick colours.

As long as brainless sheeple like some commenters here continue to "don't ask questions, just consume product and then get excited for next product!", LEGO will continue to feel emboldened to rip-off customers.

The "inflation" price hikes were always BS. These numbers just confirm it.
On top of that, trying to justify it with the drop in operating margins is throwing sand in the eyes of people. Oh your operating margins dropped? Maybe you should NOT have added 3000 people to the workforce amidst an inflationary crisis. Specially when LEGO clearly has a lot of people employed who could be cut and no loss would be felt (starting with all the people pushing political propaganda into their products and business decisions).

This is why I've severely cut my LEGO purchases since last September.
I'm done giving hundreds of euros a month to a greedy company with no decent values whatsoever. I still love the product. But the company? The company I despise with a passion.

Same story as last year - Lego prices keep rising, and I keep buying less. True, it's not so bad in respect to sets primarily aimed at kids, but even they're not cheap.

It would be nice, frankly, for Lego to do more sets aimed at adult fans that don't also cost £500

@djcbs said:
"...starting with all the people pushing political propaganda into their products and business decisions..."

Which are the sets with political propaganda in them? I'm on this site several times a day, but I don't know which ones you mean. Have there been some new releases I've missed...?

@djcbs said:
"...(starting with all the people pushing political propaganda into their products and business decisions)..."
@Banners said:
"Which are the sets with political propaganda in them?"
Uh oh, here we go again

@djcbs said:
"As long as brainless sheeple like some commenters here continue to "don't ask questions, just consume product and then get excited for next product!", LEGO will continue to feel emboldened to rip-off customers.

The "inflation" price hikes were always BS. These numbers just confirm it.
On top of that, trying to justify it with the drop in operating margins is throwing sand in the eyes of people. Oh your operating margins dropped? Maybe you should NOT have added 3000 people to the workforce amidst an inflationary crisis. Specially when LEGO clearly has a lot of people employed who could be cut and no loss would be felt (starting with all the people pushing political propaganda into their products and business decisions).

This is why I've severely cut my LEGO purchases since last September.
I'm done giving hundreds of euros a month to a greedy company with no decent values whatsoever. I still love the product. But the company? The company I despise with a passion."

Why do you despise the company so much? Sounds like you’re just mad and arbitrarily blaming Lego.

@Huw said:
" @Crushmaster said:
"Nice, so profits and revenue continue to rise while the new pricing is out of sight. Really makes one feel appreciated as a longtime customer."

Would you prefer them to drop, risking the long-term future of the company? "

Maybe if parts quality wasn't decreasing I might be less upset by the high price increases.

Overall toy price inflation in the past year was 1% in the US. What's Lego's excuse?

Remember, Lego isn't bragging to make you feel bad; they simply want to show other companies that they are relevant and worth working with. If Lego had aimed this at the fans, they might have told a very different story.

@Huw said:
" @Crushmaster said:
"Nice, so profits and revenue continue to rise while the new pricing is out of sight. Really makes one feel appreciated as a longtime customer."

Would you prefer them to drop, risking the long-term future of the company? "

Do you really think it's a feasible scenario?

Just a reminder they have no shareholders to answer to. They're financially stable enough that something drastic will have to happen for them to close shop. Like, a pandemic of ABS plastic eating bacteria. They will not lose money; they will just profit less (and if they want to profit more they can start with using smaller boxes, as most have 20%-30% air, they're just big for psychological reasons and it's silly).

I'm all for Lego making profit, big profit and continuing to rise.
So I'm hoping Lego, please if you're making good scratch and paying your employees well, keeping the company strong financially, have your products have better quality control and some things we loyal customers want.
Please, better color matching. Certain colors on some elements don't match well, especially with some minifigs, and especially with white looking faded.
Please, more prints. Especially for bigger ticket items.

@MegaBlocks said:
" @elangab said:
" @Huw said:
" @Crushmaster said:
"Nice, so profits and revenue continue to rise while the new pricing is out of sight. Really makes one feel appreciated as a longtime customer."

Would you prefer them to drop, risking the long-term future of the company? "

Do you really think it's a feasible scenario?

Just a reminder they have no shareholders to answer to. They're financially stable enough that something drastic will have to happen for them to close shop. Like, a pandemic of ABS plastic eating bacteria. They will not lose money; they will just profit less (and if they want to profit more they can start with using smaller boxes, as most have 20%-30% air, they're just big for psychological reasons and it's silly)."

Well I'm not sure how Lego were $800 million in debt in 2003 and about to go bust...

Essentially most of the comments can be summed up as "Lego should reduce their profits so that I can buy more sets as I'm too important to them".

Lego sales are increasing so why would they?

Lego have released a lot of duff sets recently and those are being reduced within weeks of release now due to poor sales."

That was in 20 years ago. Disney also experienced such a thing early 80s, but resurrected itself by late 80s. I don't think anyone will bet on Disney to go bankrupt anytime soon.

It's not about buying more sets (the sets I stopped buying were the impulse buy ones, and I don't think I'll ever go back to that), I'm just not fan of the endless chase for growth year by year. Not just Lego, cell phone companies are even worse, with needless models introduced each year, leaving piles and piles of electronic garbage for years to come. I'll give TLG credit that they at least they killing quickly unselling sets (Hidden Side, Dots, Vidiyo) - that's a lot of unneeded plastic not being produced :)

I don't know, for me there's a dissonance between the toy itself and the company. I see them as complete opposite, with the latter being a bit cynical lately.

Net profit increased 4% but inflation in most of the world has been 10%+. So in real terms their profits are down not up.

I guess if they hadn't increased prices and did everything else the same then they'd have made a loss.

I do wonder what impact the duffers they released over the last year had on these numbers.

What this tells me is that even though a bunch of us can't afford the hobby and bought significantly less, it doesn't matter a bit. Somehow the money keeps flowing. Feels like a lose-lose scenario for the fans - we can't afford sets and LEGO has no incentive to lower prices. Oh well, what can you do.

@Huw said:
" @Crushmaster said:
"Nice, so profits and revenue continue to rise while the new pricing is out of sight. Really makes one feel appreciated as a longtime customer."

Would you prefer them to drop, risking the long-term future of the company? "

A short term drop in profits does not necessarily portend the demise of a company. I think a slight decrease in revenue and profits is exactly what Lego needs; otherwise their is no reason to decrease current pricing levels.

I do not get it. If anyone thinks that Lego is expensive, than do not buy it. That is sign to the TLG. I am sure they will learn the lesson, because this is what they do, selling products still they have a market for it. If TLG would be your company you do the same. But whining here about how expensive it is, just dumb.

You don't *need* Lego. If prices are too high, don't buy new Lego. Play with the Lego you have. Buy used. Build MOCs. Join a club and admire other people's Lego. Buying and building a big new set is genuinely thrilling but I saw I was sending too much. Now I buy maybe one new set a year over $100, and enjoy what I have

@djcbs said:
"As long as brainless sheeple like some commenters here continue to "don't ask questions, just consume product and then get excited for next product!", LEGO will continue to feel emboldened to rip-off customers.

The "inflation" price hikes were always BS. These numbers just confirm it.
On top of that, trying to justify it with the drop in operating margins is throwing sand in the eyes of people. Oh your operating margins dropped? Maybe you should NOT have added 3000 people to the workforce amidst an inflationary crisis. Specially when LEGO clearly has a lot of people employed who could be cut and no loss would be felt (starting with all the people pushing political propaganda into their products and business decisions).

This is why I've severely cut my LEGO purchases since last September.
I'm done giving hundreds of euros a month to a greedy company with no decent values whatsoever. I still love the product. But the company? The company I despise with a passion."

Wow, you're whole attitude is quite frightening. Yes, how dare a company employ people and give them jobs during an inflationary crisis so you can continue to buy bricks at cheaper price, how dare they be representative of a global population - the utter bastards. Wow dude, you legitimately scare me.

And no, I don't think Lego are perfect, I think they need to get their QC back under control, sticker colouration (or the existence in larger in expensive sets), incorrect instructions, dreadful and incorrect rendering, and seemingly missing pieces (the GotG calendar has some telling reviews) etc.

@GBP_Chris said:
"What this tells me is that even though a bunch of us can't afford the hobby and bought significantly less, it doesn't matter a bit. Somehow the money keeps flowing. Feels like a lose-lose scenario for the fans - we can't afford sets and LEGO has no incentive to lower prices. Oh well, what can you do."

Don’t be discouraged. You can get most of the sets you want.
Save.
Sacrifice a little each week. Cut back in something that doesn’t effect your regular bills and over a couple months you can get that set you want.
Check eBay regularly.
Think about used sets from reputable sellers.
Check BrickLink. Some great deals there if you look.
Check Brickset’s Amazon sales listing they do often.
Don’t be a compleatist. You’ll enjoy the hobby more.

@rdn said:
"I do not get it. If anyone thinks that Lego is expensive, than do not buy it. That is sign to the TLG. I am sure they will learn the lesson, because this is what they do, selling products still they have a market for it. If TLG would be your company you do the same. But whining here about how expensive it is, just dumb."

And indeed that works. Hulkbuster, Black Panther, Table Football all reduced within weeks of release due to poor sales.

I just read that another large German toy retailer (mytoys) is planning to end its business over the coming months citing "unsustainable profit margins" as a major factor.

That's one of the effects LEGO pricing has. Since no one is willing (or able) to pay RRP for the sets anymore, retailers have to offer huge discounts in order to move the product at all. Many do so in order to entice customers to purchase with them, even if it means making only a miniscule profit - or even, more often than not in terms of LEGO, a loss. No toy retailer can afford not to offer LEGO at all, since it's the most well known brand over here next to Playmobil, but since they have to pay the wholesale prices LEGO asks, and those are rising as sharply as the RRPs, the possibility for discounts that are sustainable (while still enticing for customers) diminishes rapidly.

And since this was one of the larger retailers stocking LEGO (and one of the very few so called "premium partners" who are allowed to sell some of the exclusive sets), this is definitely going to have an effect.

That's one of the truths behind LEGO's numbers. LEGO might be doing extremely well, but ever more toy retailers are going out of business as a result.

@AustinPowers said:
"I just read that another large German toy retailer (mytoys) is planning to end its business over the coming months citing "unsustainable profit margins" as a major factor.

That's one of the effects LEGO pricing has. Since no one is willing (or able) to pay RRP for the sets anymore, retailers have to offer huge discounts in order to move the product at all. Many do so in order to entice customers to purchase with them, even if it means making only a miniscule profit - or even, more often than not in terms of LEGO, a loss. No toy retailer can afford not to offer LEGO at all, since it's the most well known brand over here next to Playmobil, but since they have to pay the wholesale prices LEGO asks, and those are rising as sharply as the RRPs, the possibility for discounts that are sustainable (while still enticing for customers) diminishes rapidly.

And since this was one of the larger retailers stocking LEGO (and one of the very few so called "premium partners" who are allowed to sell some of the exclusive sets), this is definitely going to have an effect.

That's one of the truths behind LEGO's numbers. LEGO might be doing extremely well, but ever more toy retailers are going out of business as a result. "

Yeah, we have a small-local stores here in BC ("Granville Island Toy Company", for those who know them) that sells Lego and the owner told me that the profit they make from each set is pretty much non-existent. They mostly use it to make you enter the store to buy Lego, hoping you'll purchase something else while you're there. When they discount to move goods, they're at a loss. Hopefully, they will stay open, they're genuinely friendly staff and they sell pre-sorted Collectible Minifigures (for $1 more), so that's where I get them at.

A shame he didn't have time to address any of the numerous quality issues regarding the much beloved bricks (such as the hideous injection marks on the 44860 and 44842). If only they had enough money to afford some of the molds from the 80s

I see people talking about the smaller retailers being pushed out.
It's a shame. Made me think of when I started toy collecting in mid 90s (young man, starting a fulltime job, like more than a decade since getting toys as a kid), I only found I could find my Star Wars figs, and other action figures, etc from only larger major chain retailers here in NYC.
TRU, FAO schwartz, KayBee Toys, etc. back then.
The other smaller toys shops in NYC were either comic book shops who only had really sought after toys, collector item stuff, or marked up chase figures, etc, and small toys shops that mostly have arts and crafts type toys, wooden stuff, etc. And anime toy stores (those always seemed to do well).
When I wanted to order stuff from those smaller shops, they couldn't accommodate unless I ordered by the case or a minimum amount, or if they know a few customers would order a certain amount together.
Then when I got back into Lego (when I had my son), again, I only really found Target and TRU as the go-to to get stuff regularly. TRU always marked up too high, same with FAO Schwartz. Sometimes Target did back then but not often.
Kaybee would have great sales but they went out of business like late 2000s? TRU left as well but now only in Macy's and their Lego selection is so limited depending on which Macy's. Seems not worth it if you're a collector.
The only time I saw an indy toy shop here (which was like a general type store that had a large toy section with most of the mainstream stuff) was in the late 70s into early 80's when I was little. Those also went out back then too.
And now (if not online), I only shop at the physical Lego store on 5th Ave. or 23rd St., but of note the one in the Queens mall closed a couple years back. Target not really anymore except for polys.
I hope the small shops keep going but it's rough out there with online dominating nowadays and only the big retailers carrying everything. Gotta' give the independent toy shops alot of credit for surviving wherever they are.

@Draykov said:
"Nice, but not surprising, to see the "Icons" theme get specific mention in the report as a popular theme.

As for the relatively small 4-5% profit margin, and people seeing that as some kind of crime, I refer you to Milton Friedman's essay: "A Friedman Doctrine: The Social Responsibility of Business is to Increase Its Profits."

LEGO has never been a non-profit organization. If they make any profit for KIRKBI A/S and The LEGO Foundation, they are doing what they set out to do from the outset. We just happen to get nice toys out of it. "

People need to learn to read. LEGO Profit is not 4%, their net profit GREW by 4%.

Net profit margin is 20% (13.8 net profit / 64.6 revenue), which is VERY healthy for a company, especially given the economic crisis we're in.

@windjammer said:
"Net profit increased 4% but inflation in most of the world has been 10%+. So in real terms their profits are down not up.

I guess if they hadn't increased prices and did everything else the same then they'd have made a loss.

I do wonder what impact the duffers they released over the last year had on these numbers.

"
They certainly wouldn't have made a loss, just a slightly smaller profit. Their profit could decrease by 30% and it would still be a very profitable company.

For those condescendingly saying LEGO is not a non-profit organisation, there is an enormous difference between non-profit and excessive/obscene profits. With LEGO being privately owned and often trying to take the moral high ground, they could and should absorb more of the increasing costs at a time when many customers are facing financial hardship.

We all agree LEGO is not an essential but neither is it a true luxury brand like Chanel, Gucci, Rolls Royce or Ferrari. It has been attainable by the masses for most of its 90 year history, and that should continue. Customer satisfaction is more important than a few percent on its profit or margins.