Lego is building on its presence in China after “stabilising the business” in 2018 despite the collapse of Toys R Us damaging consumer exposure to its products.
Sales had fallen for the first time since 2004 the previous year, as demand for its plastic block toys suffered in a crowded toy market.
The company warned it would take some time to return to growth.
It had also announced plans to cut 8% of its global workforce as part of its efforts to “reset” the business.
However, the private Danish firm said on Wednesday that revenue rose 4% to $5.5bn (£4.1bn) in 2018 – with profits hitting $1.2bn (£900m) thanks largely to double-digit growth in China and a partial recovery of sales in the US and western Europe.
It partly credited Lego City and Lego Technic products for driving the revenue and profit recovery.
Chief executive Niels B Christiansen said: “We are especially encouraged by our progress given the challenges facing the toy industry and the departure of specialist retailers such as Toys R Us that went under last year.
“These shifts gave us the opportunity to strengthen our partnerships with retailers and find new ways to connect with shoppers and consumers across digital and physical channels.”
“We also grew market share in our largest markets around the world, bucking industry trends,” he added.
The company announced plans for 80 Lego stores in 18 Chinese cities this year to build on its sales success in the world’s second-largest economy. Its first flagship store in Beijing was opened last weekend.
(c) Sky News 2019: Lego builds China empire as profit growth returns