Lego hopes its household brand power can overcome the long arm of Trump's tariffs. 

"If tariffs would be there and we get to know whatever level they would be at, we will deem whether they will be permanent or more temporary in nature, and then we would sit down and figure out how do we react to that in a way that has the typical long-term perspective of the Lego Group," Lego Group CEO Niels B. Christiansen told me on Yahoo Finance (video above) on Tuesday.

Lego reported today that sales last year increased 13% from the prior year to DKK 74.3 billion. Gains were strongest in the Americas, Europe, and Middle East regions. "The brand is super relevant right now," Christiansen said.

Operating and net profits rose at a slower pace than sales (10% and 5%, respectively) as Lego invested in new stores and manufacturing capacity.

Business Wire

Lego called out the potential for a slowing 2025 after a solid 2024, likely in part due to macroeconomic uncertainties. 

Full-year revenue is projected to grow by a low-single-digit percentage. Net profits are expected to be flat year over year.

Lego has focused on diversifying its supply chain in recent years but may not be totally immune to Trump tariffs. 

Read more: What Trump's tariffs mean for the economy and your wallet

The company broke ground on its first US manufacturing site in Virginia last year. A $1 billion investment, the facility is slated to begin production in 2027. 

A new $1.3 billion facility will start operations in Vietnam in April.

The company's plants in Mexico and China have been expanded too. 

Lego said in its annual report that capacity in Mexico and China rose 13% and 27%, respectively, year over year. The company now has five manufacturing facilities and four regional distribution centers globally.

Christiansen said there are no plans to shutter Mexico operations because of tariffs.

"If there would be tariffs from the US towards Mexico, that would impact us," Christiansen acknowledged. 

Trump's tariffs could materially impact consumer companies as a sizable portion of their merchandise is sourced from China due to its low production cost. But tariffs could also stunt demand as consumers balk at price hikes.

The tariffs may reduce American consumers' spending power by $46 billion to $78 billion every year they are in place, the National Retail Federation estimates.

Nearly 80% of US toys are manufactured in China, according to industry trade group the Toy Association.

Hasbro (HAS) CEO Chris Cocks told me last week on Yahoo Finance's Opening Bid podcast that toy prices would go up 50% in some cases if more production is brought back to the US. The cost increases reflect the intricate nature of making many toys and the difficulty of finding the skilled labor to do so.

Brian Sozzi is Yahoo Finance's Executive Editor. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.

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