Revenue Recognition

9 Months Ended

Sep. 30, 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):

	September 30, 2023		December 31, 2022
Deferred contract assets included in:
Other current assets	$	28,219	$	28,121
Other non-current assets	55,727		55,564
	$	83,946	$	83,685

	September 30, 2023		December 31, 2022
Deferred contract liabilities included in:
Other current liabilities	$	36,141	$	36,335
Other non-current liabilities	70,727		70,999
	$	106,868	$	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 September 30, 2023 and October 1, 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. During the nine months ended September 30, 2023 and October 1, 2022, the Company recognized revenue of $28 million and $26 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 September 30, 2023 and October 1, 2022 and 98% and 99% for the nine months ended September 30, 2023 and October 1, 2022, respectively.

Net sales were as follows (in thousands):

	Three Months Ended				Nine Months Ended
	September 30, 2023		October 1, 2022		September 30, 2023		October 1, 2022
Retail stores	$	409,268	$	466,632	$	1,270,076	$	1,401,789
Online, phone, chat and other	63,380		73,934		187,888		214,980
Total Company	$	472,648	$	540,566	$	1,457,964	$	1,616,769

Obligation for Sales Returns

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

	Nine Months Ended
	September 30, 2023		October 1, 2022
Balance at beginning of year	$	25,594	$	22,368
Additions that reduce net sales	82,718		79,353
Deductions from reserves	(85,300)		(76,070)
Balance at end of period	$	23,012	$	25,651