COMMITMENTS AND CONTINGENCIES (Tables)

6 Months Ended

Jun. 29, 2024

Commitments and Contingencies Disclosure [Abstract]

Schedule of Reserve for the Estimated Product Recall Expenses

The following table summarizes the activity of the reserve for the estimated product recall expenses (in thousands):

	June 29, 2024
Balance, December 30, 2023	$	13,090
Actual product refunds, replacements and recall-related costs	(3,051)
Gift card issuances(1)	(3,168)
Balance, June 29, 2024	$	6,871

_________________________

(1)As of June 29, 2024, we had $3.4 million in unredeemed recall-related gift card liabilities, which are included in contract liabilities within accrued expenses and other current liabilities on our consolidated balance sheet. For the three and six months ended June 29, 2024, we recognized net sales of $2.3 million and $4.3 million from redeemed recall-related gift cards.

Schedule of Recall Reserve Adjustment of Estimated Product Recall Expenses

The product recalls, which include recall reserve adjustments and other incurred costs, had the following effect on our income before income taxes as of the dates indicated (in thousands):

	Three Months Ended				Six Months Ended
	June 29, 2024		July 1, 2023		June 29, 2024		July 1, 2023
Decrease to net sales(1)	$	—	$	(24,490)	$	—	$	(24,506)
Decrease to cost of goods sold(2)	—		5,052		—		6,305
Decrease to gross profit	—		(19,438)		—		(18,201)
Decrease to SG&A expenses(3)	—		10,716		—		10,549
Decrease to income before income taxes	$	—	$	(8,722)	$	—	$	(7,652)

_________________________

(1)For the three and six months ended July 1, 2023, primarily reflects the unfavorable impact of the recall reserve adjustment related to higher estimated future recall remedies. Of the total net sales impact, $8.1 million and $16.4 million was allocated to our DTC and wholesale channels, respectively, for the three and six months ended July 1, 2023. These amounts were allocated based on the historical channel sell-in basis of the affected products.

(2)For the three and six months ended July 1, 2023, reflects the favorable impact of the recall reserve adjustment related to lower estimated costs of future product replacement remedy elections and logistics costs. For the six months ended July 1, 2023, includes a $1.3 million favorable impact related to an inventory reserve adjustment.

(3)For the three and six months ended July 1, 2023, reflects the impact of the favorable recall reserve adjustment primarily related to lower estimated other recall-related costs.