Revenue Recognition

9 Months Ended

Oct. 02, 2021

Revenue from Contract with Customer [Abstract]

Revenue Recognition

Revenue Recognition

Deferred contract assets and deferred contract liabilities are included in our condensed consolidated balance sheets as follows (in thousands):

	October 2, 2021		January 2, 2021
Deferred Contract Assets included in:
Other current assets	$	27,115	$	26,593
Other non-current assets	49,125		37,976
	$	76,240	$	64,569

	October 2, 2021		January 2, 2021
Deferred Contract Liabilities included in:
Other current liabilities	$	35,430	$	35,288
Other non-current liabilities	63,703		49,689
	$	99,133	$	84,977

The deferred revenue and costs related to SleepIQ technology are recognized on a straight-line basis over the product's estimated life of 4.5 years because our inputs are generally expended evenly throughout the performance period. During the three months ended October 2, 2021 and September 26, 2020, we recognized revenue of $8 million and $9 million, respectively, that were included in the deferred contract liability balances at the beginning of the respective periods. During the nine months ended October 2, 2021 and September 26, 2020, we recognized revenue of $22 million and $27 million, respectively, that were included in the deferred contract liability balances at the beginning of the respective periods.

Revenue from goods and services transferred to customers at a point in time accounted for approximately 99% of our revenues for the three and nine months ended October 2, 2021 and 98% of our revenues for the three and nine months ended September 26, 2020.

Net sales were as follows (in thousands):

	Three Months Ended				Nine Months Ended
	October 2, 2021		September 26, 2020		October 2, 2021		September 26, 2020
Retail stores	$	565,939	$	456,756	$	1,481,780	$	1,097,872
Online, phone, chat and other	74,454		74,399		211,185		190,787
Total Company	$	640,393	$	531,155	$	1,692,965	$	1,288,659

Obligation for Sales Returns

The activity in the sales returns liability account was as follows (in thousands):

	Nine Months Ended
	October 2, 2021		September 26, 2020
Balance at beginning of year	$	24,765	$	19,809
Additions that reduce net sales	69,877		55,086
Deductions from reserves	(66,124)		(50,810)
Balance at end of period	$	28,518	$	24,085