Lego reports a slowdown in revenue growth and profits for the first half of this year, as the company invests in expanding its manufacturing capabilities.
The enterprise recently stated that it is ready to step up its game in the United States, and part of its plan is to employ more people and deploy new production facilities.
The group is the most profitable global toy maker, leaving behind rivals such as Mattel, the company that crafts the famous Barbie Doll.
Lego recorded a growth in revenue of 11 percent for the first six months of the year, reaching 15.69 billion Danish crowns ($2.35 billion). During the same time frame, operating profit spiked up by 1 percent at 4.66 billion Danish crowns ($700 million). However, the net profit plummeted almost 2 percent to 3.49 billion Danish crowns ($524 million).
During the last 12 years, sales of Lego kept increasing by 15 percent per year, or even more. 2015 was a particularly good year for the enterprise, with a whopping 25 percent growth rate.
While Europe and Asia, the most rounded markets for the company, kept pumping money into the vividly colored brick toys, the Americas lagged behind, particularly in 2016.
Lego was unable to keep up with demand in North America, which meant a reduction of its marketing activities in the area, leading to a deceleration during the first half of 2016.
John Goodwin, the company's chief financial officer, told Reuters that Lego is cooperating closely with its retail partners to have everything in place for the winter holiday season. According to Goodwin, Lego is preparing to go back "on the growth trajectory" in the region.
To make sure that is the case, the company has a new factory under construction in Jiaxing, China. Lego has also raised its production capacity in Mexico and is looking to double the capacity of its plant in Hungary.
In line with its expansion plans, Lego also increased its workforce by 24 percent, employing more than 3,500 new workers from January to June this year.
After its latest and biggest recruiting campaign, Lego is counting a workforce of around 18,500 people worldwide.
"We feel we need to invest, to build some breathing space," Goodwin says.
The CFO acknowledges that investing in both infrastructure and new recruits will take its toll on short-term profits. However, he also recognizes that in order to sustain and fuel long-term growth, such investments are mandatory.
When asked about its continuous growth pattern, the company pointed out that its success comes as a reflection of its workforce's hard work combined with the inspired marketing for installments such as Lego City, Lego Star Wars and Lego Ninjago.
