Lego keeps beating the toy industry. Its secret weapon is not what you'd expect

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How Lego keeps beating the broader toy industry

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Lego just put up another banner year — with help from a behind-the-scenes secret weapon.

The Danish company on Tuesday reported a 12% jump in revenue to 83.5 billion Danish kroner, or $12.9 billion, for fiscal year 2025. Operating profit rose 18% year over year to 22 billion Danish kroner, or $3.4 billion, the company said.

“When we look at the growth area, it’s kind of pretty broad-based in the sense that it’s not one product or one theme, it’s pretty much across the board,” Lego CEO Niels Christiansen told CNBC.

Lego’s consumer sales jumped 16%, outpacing the overall toy market’s 7% growth over the same period, the company reported. Lego has steadily outperformed the toy industry since the pandemic, growing its market share and its space on retail shelves.

The brickmaker’s secret: a combination of trendspotting and a streamlined supply chain.

Lego has a hearty licensed product line, featuring sets based on a wide range of popular films, TV shows and video games, as well as a substantial number of in-house brands like its flower arrangements, art pieces and architectural structures.

Last year, Lego launched its largest portfolio ever, with more than 860 sets hitting shelves, the company said. Around half of those were new items.

In expanding its catalog of products, Lego has also grown its consumer base. Gateways into the brand such as its line of botanicals — plants, flower bouquets and succulents — and its ongoing partnership with Epic Games — which brings Lego to the digital space and elements from the popular video game Fortnite into the physical world — have encouraged newcomers into the brick-building space, Christiansen said.

Once there, these customers discover other sets and continue building. And it’s not just kids, adult builders are an important piece of Lego’s sales.

Toy experts told CNBC that Lego was ahead of the curve, embracing adults as a key toy consumer long before the industry coined the term “kidult.” Adults buying for themselves account for between 25% and 30% of all global toy sales, according to data from Circana.

“We hit really well on a lot of different type of products and ways of building and passion points,” Christiansen said.

One of the company’s recent additions to the portfolio is its partnership with Formula One auto racing. Lego has been present at F1 races since last season, hosting in-person activities that have included functional, life-size cars and handcrafted trophies made out of bricks for podium finishers.

Formula One cars and a circuit made with Lego are displayed at the 2025 Canadian International AutoShow at the Metro Convention Centre in Toronto, Feb. 21, 2025.

Nurphoto | Getty Images

F1 building sets range from Duplo sets for preschool children, 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 has signed on as a team sponsor for an F1 Academy car starting in 2026.

But Lego’s real secret weapon in outpacing the toy industry isn’t as flashy.

Brick by brick

Lego has developed an incredibly efficient supply chain, which allows it to produce products closer to their final retail destination.

For example, right now 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 Vietnam location to service the Asia-Pacific region and is set to open up a new facility in Virginia in 2027.

Christiansen said the new U.S.-based factory will help keep up with the growing demand for product in the Americas.

Lego products are displayed at a Lego store in New York, Aug. 29, 2024.

Spencer Platt  | Getty Images

Not only does this make the shipping process more efficient and shorten delivery times for fans, it also reduces costs. Lego can tailor what it’s manufacturing based on regional demand, meaning it’s not creating excess inventory.

Lego can also be more nimble than its competitors during trade disputes or shipping disruptions because its factories are not all concentrated in one area.

“You come out of a year like 2025, and we’ve seen that growth that was beyond our expectations, and … what a mountain to climb,” Christiansen said. “On the other hand, we have really strong momentum. It continues throughout the year and into this year. So, I think we feel good about growing on top of '25, maybe not to the same growth rate. Our expectation would be high-single-digit, which would be fantastic.”

In 2026, Lego is introducing sets based on the likes of Pokémon, “Lord of the Rings” and The Legend of Zelda, as well as launching its new innovation: the Lego Smart Brick. The new high-tech, two-by-four Lego brick, which is part of several new “Star Wars” sets, contains sensors that react to movement and play sounds and light up when played with.

“So I think there are many different things that should take well throughout the year,” Christiansen said.

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