Revenue Recognition

3 Months Ended

Apr. 02, 2022

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):

	April 2, 2022		January 1, 2022
Deferred contract assets included in:
Other current assets	$	26,926	$	28,048
Other non-current assets	53,244		49,343
	$	80,170	$	77,391

	April 2, 2022		January 1, 2022
Deferred contract liabilities included in:
Other current liabilities	$	34,999	$	36,490
Other non-current liabilities	68,657		63,680
	$	103,656	$	100,170

The deferred revenue and costs related to SleepIQ® technology are currently recognized on a straight-line basis over the product's estimated life of 4.5 to 5.0 years because our inputs are generally expended evenly throughout the performance period. During the three months ended April 2, 2022 and April 3, 2021, we recognized revenue of $9 million and $7 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 98% of our revenues for the three months ended April 2, 2022 and 99% of our revenues for the three months ended April 3, 2021.

Net sales were as follows (in thousands):

	Three Months Ended
	April 2, 2022		April 3, 2021
Retail stores	$	444,336	$	489,188
Online, phone, chat and other	82,794		79,068
Total Company	$	527,130	$	568,256

Obligation for Sales Returns

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

	Three Months Ended
	April 2, 2022		April 3, 2021
Balance at beginning of year	$	22,368	$	24,765
Additions that reduce net sales	26,667		23,711
Deductions from reserves	(28,758)		(23,866)
Balance at end of period	$	20,277	$	24,610