Lego Group reported record full-year 2025 revenue of 73.2 billion Danish kroner ($10.8 billion), up 12% year-over-year, outpacing a global toy industry that contracted 4% during the same period. Operating profit rose 18% to 19.8 billion kroner ($2.9 billion), exceeding analyst expectations of 17.5 billion kroner, as the company capitalized on surging demand for adult collector sets that retail at premium price points.
Market Context
The global toy industry faced headwinds in 2025 as persistent inflation squeezed household discretionary spending, particularly affecting families with young children. Major competitors including Mattel and Hasbro reported flat to declining sales during the year, citing weakness in the core children's toy segment. Meanwhile, consumer spending on premium adult hobbies and collectibles demonstrated resilience, benefiting companies that pivoted toward older demographics.
Analysis
The unexpected driver of Lego's performance was its expanded adult collectors line, which the company first scaled significantly in 2023 and continued investing in through 2025. Sets targeting ages 18 and older—including complex architecture series, adult-friendly Star Wars kits, and botanical collection replicas—generated 34% of total revenue, up from 24% in 2023. These sets carry average retail prices of $120 versus $30 for traditional children's sets, delivering significantly higher margins.
Institutional investors noted Lego's successful diversification strategy reduced dependence on the volatile children's toy cycle. The company's direct-to-consumer online platform grew 28%, allowing higher margins than retail partnerships. Additionally, Lego's theme park operations in Denmark, Florida, and California contributed estimated 8% of total revenue as experience-based spending outperformed physical product sales.
Management emphasized continued investment in adult offerings during the earnings call, announcing plans to launch 150 new adult-themed sets in 2026. However, analysts cautioned that market saturation risk exists as competitors introduce competing collector lines.
Key Numbers
- Full-year 2025 revenue: 73.2 billion Danish kroner ($10.8 billion), +12% YoY
- Operating profit: 19.8 billion kroner ($2.9 billion), +18% YoY
- Adult collector sets: 34% of total revenue, up from 24% in 2023
- Direct-to-consumer online sales: +28% YoY
- Global toy industry performance: -4% during 2025
What to Watch
Lego management guided for 8-10% revenue growth in 2026, with operating margin expansion of 50 basis points projected. Key catalysts include the planned 150 new adult-themed set releases and potential expansion of retail experience stores in Asian markets. The company faces headwinds from rising raw material costs and currency volatility, particularly between the Danish krone and dollar. First-half 2026 results due in August will test whether adult collector demand sustains momentum or normalizes after two years of exceptional growth.
The stock trades at 23x forward earnings, reflecting premium valuation relative to consumer discretionary peers at 18x. Analysts remain divided on sustainability of the collector boom, with bulls citing brand strength and bears pointing to normalization risk as pandemic-era hobbyist demand moderates.