Lego wobbles after American downturn and higher wage billComments Off on Lego wobbles after American downturn and higher wage bill
LEGO, the Danish maker of colourful toy bricks, suffered a rare blip in performance after profits slipped 1.8% due to lower American sales and a massive recruitment drive.
The maker of kids’ favourites like Lego Ninjago and Lego City enjoyed success in Europe and Asia with “high double-digit growth” but America, which includes the huge US market, flopped.
A rise in Lego staff, increasing 24% to 18,500 people, and new factories in China and Mexico also weighed on profitability.
Lego said it was trying to arrest the slide in America. “In the US, we acknowledge that we have not provided the initiatives and support needed to keep the same high level of growth,” chief financial officer John Goodwin said.
“As a result, we have worked closely with our customers and dialled up our initiatives in the American market, in order to regain momentum,” he added.
Sales rose 11% to 15.7 billion kroner (£1.8 billion) from 14.1 billion kroner but net profit fell to 3.48 billion kroner for the first six months of 2016 from 3.55 billion kroner.
The company is owned by Denmark’s richest man, Kjeld Kirk Kristiansen.