Revenue Recognition

6 Months Ended

Jul. 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):

	July 2, 2022		January 1, 2022
Deferred contract assets included in:
Other current assets	$	27,269	$	28,048
Other non-current assets	53,377		49,343
	$	80,646	$	77,391

	July 2, 2022		January 1, 2022
Deferred contract liabilities included in:
Other current liabilities	$	35,405	$	36,490
Other non-current liabilities	68,610		63,680
	$	104,015	$	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 July 2, 2022 and July 3, 2021, we recognized revenue of $9 million and $8 million, respectively, that were included in the deferred contract liability balances at the beginning of the respective periods. During the six months ended July 2, 2022 and July 3, 2021, we recognized revenue of $18 million and $15 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 and six months ended July 2, 2022 and for the three and six months ended July 3, 2021.

Net sales were as follows (in thousands):

	Three Months Ended				Six Months Ended
	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Retail stores	$	490,820	$	426,653	$	935,157	$	915,841
Online, phone, chat and other	58,253		57,663		141,046		136,731
Total Company	$	549,073	$	484,316	$	1,076,203	$	1,052,572

Obligation for Sales Returns

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

	Six Months Ended
	July 2, 2022		July 3, 2021
Balance at beginning of year	$	22,368	$	24,765
Additions that reduce net sales	53,964		42,272
Deductions from reserves	(51,676)		(45,820)
Balance at end of period	$	24,656	$	21,217