(Bloomberg) -- Lego Group reported the smallest increase in profit in three years as the world’s largest toymaker faced higher costs and invested heavily in production to meet rising demand.
Net income rose 3.7% to 13.8 billion kroner ($2 billion) in 2022, the Billund, Denmark-based company said on Tuesday. Expenses jumped 22% and revenue rose 17% to 64.6 billion kroner, driving gains in market share.
The maker of colorful building bricks, which is owned by the billionaire Kirk Kristiansen family, opened 155 new branded stores last year and increased production at three of its five factories. It’s also working on building two new large facilities in Vietnam and the US. The company said it expects to win market share again this year with “single-digit” revenue growth.
Lego’s US rival Mattel Inc., the owner of the Barbie brand, last month said it expects no revenue growth this year, while the other large US toymaker, Hasbro Inc, said it sees a contraction.
Lego’s results were better than the company had expected, Chief Executive Officer Niels B. Christiansen said.
Earnings momentum “was driven by the investments made during this time which are both paying off now and establishing a foundation for long-term, sustainable growth,” the CEO said in the statement. “We plan to accelerate investments in strategic initiatives in the coming years.”
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