Lego reported a 1.8 per cent decline in profit for the first half of the year as Europe’s biggest toymaker hired more workers and invested in China and Mexico.
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The company said its sales growth was driven by its established lines such as Lego City, Lego Ninjago and Lego Star Wars, as well as its new Lego Nexo Knights theme.
The privately held group said net profit was 3.5 billion Danish kroner ($525 million), the same as the equivalent period a year ago.
However, net profit fell slightly to 3.5bn DKK (£393m) from 3.6bn DKK in the first half of 2015.
Business has been so brisk at the world’s most profitable toymaker that Lego previous year did something unusual: It began looking for ways to discourage customers from buying its products.
“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”, he said. The company said its new factory in China has started producing, with further expansion planned. “In the USA, 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.
To support the continued growth and globalisation of the company, Lego also added more than 3,500 new colleagues in the first half of 2016, an increase of 24 percent, to 18,500 globally.
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“These investments in people and infrastructure will obviously have an impact on our short-term profit growth”.
