COPENHAGEN (Reuters) - Danish toymaker Lego, known for its colorful building bricks, said its growth slowed in the fourth quarter and it expects a flat or weaker European toy market in 2012, after it notched up record profit and sales last year.
Lego, which says it is the world’s third-biggest toymaker after U.S. groups Mattel (MAT.O) and Hasbro (HAS.O) and ahead of fourth-ranked Namco Bandai (7832.T) of Japan, said it expects continued growth in sales in 2012 and a satisfactory result for the year, but the economic crisis in certain European markets was slowing its progress.
“In the light of these economic trends the Lego Group expects a flat or slightly declining development in the overall European toy market in 2012,” it said.
The family-owned group reported record 2011 revenues and profits on Thursday with sales up 17 percent to nearly $3.50 billion and operating profits up nearly 20 percent to $1.06 billion.
“Growth in the North American market continued undiminished, and also in most European and Asian markets we were able to report double-digit increases in sales,” Lego Group Chief Executive Jorgen Vig Knudstorp said in a statement.
“The Group’s share of the global market is now 7.1 percent,” said Lego Group, which has manufacturing operations in Denmark, Mexico, Hungary and the Czech Republic.
Sales of license-based products in particular were above expectations in 2011, the company said. “This was the case with, for example, Lego products based on Star Wars, Harry Potter and Pirates of the Caribbean.”
Lego announced last month that it got a 10-year extension to a deal with American filmmaker George Lucas that allows it to manufacture toys with a Star Wars theme.
Sales of the group’s more classic product lines also rose sharply in 2011, the company said.
Mattel and Hasbro recently reported forecast-beating results for the fourth quarter, and Mattel said it was raising prices to fight increasing costs for materials and labor.
Reporting by John Acher; Editing by Elaine Hardcastle