Revenue Recognition

3 Months Ended

Apr. 01, 2023

Revenue from Contract with Customer [Abstract]

Revenue Recognition

Revenue Recognition

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

	April 1, 2023		December 31, 2022
Deferred contract assets included in:
Other current assets	$	28,313	$	28,121
Other non-current assets	56,264		55,564
	$	84,577	$	83,685

	April 1, 2023		December 31, 2022
Deferred contract liabilities included in:
Other current liabilities	$	36,509	$	36,335
Other non-current liabilities	71,847		70,999
	$	108,356	$	107,334

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 the Company’s inputs are generally expended evenly throughout the performance period. During the three months ended April 1, 2023 and April 2, 2022, the Company recognized revenue of $10 million and $9 million, respectively, that was 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 revenues for both the three months ended April 1, 2023 and April 2, 2022.

Net sales were as follows (in thousands):

	Three Months Ended
	April 1, 2023		April 2, 2022
Retail stores	$	458,663	$	444,336
Online, phone, chat and other	67,864		82,794
Total Company	$	526,527	$	527,130

Obligation for Sales Returns

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

	Three Months Ended
	April 1, 2023		April 2, 2022
Balance at beginning of year	$	25,594	$	22,368
Additions that reduce net sales	29,843		26,667
Deductions from reserves	(31,366)		(28,758)
Balance at end of period	$	24,071	$	20,277