COVID-19 Pandemic

12 Months Ended

Jan. 01, 2022

Unusual or Infrequent Items, or Both [Abstract]

COVID-19 Pandemic

COVID-19 Pandemic

At the onset of the COVID-19 pandemic in mid-March 2020, government restrictions resulted in the temporary closure of most of our retail stores, with 47% of our stores closed on average during the second quarter of 2020. While prioritizing the safety of our team, serving our customers and ensuring business continuity, we swiftly took decisive actions to strengthen our liquidity, cash flows and financial position, and mitigate the future impact on our operations and financial performance. Despite the COVID-19 pandemic challenges, we continue to design, manufacture, sell and service Sleep Number products, invest in our business, develop and launch new products, and deliver innovative customer solutions.

The COVID-19 pandemic impacted our 2020 and 2021 financial performance. In 2020, the COVID-19 pandemic mainly impacted our second-quarter financial performance, as we generated strong demand and financial performance during the full-year of 2020. In 2021 we continued to generate strong demand; however, our financial performance was impacted by: (i) global supply constraints which affected our ability to deliver products to our customers; and (ii) incremental costs from labor and material inflation, and expediting costs resulting from current-period supply chain shortages. The pandemic's future effects on our global supply chain, consumer demand and our ongoing financial performance remains uncertain. See Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations and Part I: Item 1A. Risk Factors for additional discussion on the COVID-19 pandemic and the impact on our business.