Cover Page
Cover Page shares in Thousands | 6 Months Ended |
Jul. 03, 2021shares | |
Cover [Abstract] | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Period End Date | Jul. 3, 2021 |
Document Transition Report | false |
Entity File Number | 000-25121 |
Entity Registrant Name | SLEEP NUMBER CORPORATION |
Entity Incorporation, State or Country Code | MN |
Entity Tax Identification Number | 41-1597886 |
Entity Address, Address Line One | 1001 Third Avenue South |
Entity Address, City or Town | Minneapolis, |
Entity Address, State or Province | MN |
Entity Address, Postal Zip Code | 55404 |
City Area Code | 763 |
Local Phone Number | 551-7000 |
Title of 12(b) Security | Common Stock, par value $0.01 per share |
Trading Symbol | SNBR |
Security Exchange Name | NASDAQ |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 23,622 |
Amendment Flag | false |
Document Fiscal Period Focus | Q2 |
Document Fiscal Year Focus | 2021 |
Current Fiscal Year End Date | --01-01 |
Entity Central Index Key | 0000827187 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jul. 03, 2021 | Jan. 02, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 2,173 | $ 4,243 |
Accounts receivable, net of allowances of $1,098 and $1,046, respectively | 23,205 | 31,871 |
Inventories | 88,577 | 81,362 |
Income taxes receivable | 1,578 | 0 |
Prepaid expenses | 28,900 | 20,839 |
Other current assets | 42,564 | 43,489 |
Total current assets | 186,997 | 181,804 |
Non-current assets: | ||
Property and equipment, net | 182,398 | 175,223 |
Operating lease right-of-use assets | 344,423 | 314,226 |
Goodwill and intangible assets, net | 71,669 | 72,871 |
Other non-current assets | 69,009 | 56,012 |
Total assets | 854,496 | 800,136 |
Current liabilities: | ||
Borrowings under credit facility | 382,200 | 244,200 |
Accounts payable | 129,922 | 91,904 |
Customer prepayments | 119,435 | 72,017 |
Accrued sales returns | 21,217 | 24,765 |
Compensation and benefits | 54,219 | 76,786 |
Taxes and withholding | 13,779 | 23,339 |
Operating lease liabilities | 67,648 | 62,077 |
Other current liabilities | 57,708 | 60,856 |
Total current liabilities | 846,128 | 655,944 |
Non-current liabilities: | ||
Deferred income taxes | 663 | 242 |
Operating lease liabilities | 311,672 | 283,084 |
Other non-current liabilities | 99,691 | 84,844 |
Total liabilities | 1,258,154 | 1,024,114 |
Shareholders’ deficit: | ||
Undesignated preferred stock; 5,000 shares authorized, no shares issued and outstanding | 0 | 0 |
Common stock, $0.01 par value; 142,500 shares authorized, 23,622 and 25,390 shares issued and outstanding, respectively | 236 | 254 |
Additional paid-in capital | 0 | 0 |
Accumulated deficit | (403,894) | (224,232) |
Total shareholders’ deficit | (403,658) | (223,978) |
Total liabilities and shareholders’ deficit | $ 854,496 | $ 800,136 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jul. 03, 2021 | Jan. 02, 2021 |
Current assets: | ||
Allowances | $ 1,098 | $ 1,046 |
Shareholders’ deficit: | ||
Undesignated preferred stock, shares authorized (in shares) | 5,000 | 5,000 |
Undesignated preferred stock, shares issued (in shares) | 0 | 0 |
Undesignated preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 142,500,000 | 142,500,000 |
Common stock, shares issued (in shares) | 23,622,000 | 25,390,000 |
Common stock, shares outstanding (in shares) | 23,622,000 | 25,390,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 03, 2021 | Jun. 27, 2020 | Jul. 03, 2021 | Jun. 27, 2020 | |
Income Statement [Abstract] | ||||
Net sales | $ 484,316 | $ 284,938 | $ 1,052,572 | $ 757,504 |
Cost of sales | 191,465 | 121,928 | 403,803 | 292,363 |
Gross profit | 292,851 | 163,010 | 648,769 | 465,141 |
Operating expenses: | ||||
Sales and marketing | 205,994 | 130,165 | 429,611 | 337,909 |
General and administrative | 41,220 | 36,716 | 83,812 | 67,788 |
Research and development | 15,916 | 8,254 | 29,202 | 18,755 |
Total operating expenses | 263,130 | 175,135 | 542,625 | 424,452 |
Operating income (loss) | 29,721 | (12,125) | 106,144 | 40,689 |
Interest expense, net | 1,607 | 3,940 | 2,584 | 6,284 |
Income (loss) before income taxes | 28,114 | (16,065) | 103,560 | 34,405 |
Income tax expense (benefit) | 5,864 | (3,435) | 14,676 | 7,895 |
Net income (loss) | $ 22,250 | $ (12,630) | $ 88,884 | $ 26,510 |
Basic net income (loss) per share: | ||||
Net income (loss) per share – basic (in dollars per share) | $ 0.91 | $ (0.45) | $ 3.57 | $ 0.95 |
Weighted-average shares – basic (in shares) | 24,371,000 | 27,923,000 | 24,874,000 | 27,890,000 |
Diluted net income (loss) per share: | ||||
Net income (loss) per share – diluted (in dollars per share) | $ 0.88 | $ (0.45) | $ 3.44 | $ 0.93 |
Weighted-average shares – diluted (in shares) | 25,194,000 | 27,923,000 | 25,869,000 | 28,523,000 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Shareholders' (Deficit) - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit |
Beginning balance (in shares) at Dec. 28, 2019 | 27,961 | |||
Beginning balance at Dec. 28, 2019 | $ (159,431) | $ 280 | $ 0 | $ (159,711) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income (loss) | 39,140 | 39,140 | ||
Exercise of common stock options (in shares) | 167 | |||
Exercise of common stock options | 3,283 | $ 1 | 3,282 | |
Stock-based compensation (in shares) | 396 | |||
Stock-based compensation | 2,051 | $ 4 | 2,047 | |
Repurchases of common stock (in shares) | (888) | |||
Repurchases of common stock | (40,952) | $ (9) | (5,329) | (35,614) |
Ending balance (in shares) at Mar. 28, 2020 | 27,636 | |||
Ending balance at Mar. 28, 2020 | (155,909) | $ 276 | 0 | (156,185) |
Beginning balance (in shares) at Dec. 28, 2019 | 27,961 | |||
Beginning balance at Dec. 28, 2019 | (159,431) | $ 280 | 0 | (159,711) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income (loss) | 26,510 | |||
Ending balance (in shares) at Jun. 27, 2020 | 27,725 | |||
Ending balance at Jun. 27, 2020 | (163,018) | $ 277 | 5,519 | (168,814) |
Beginning balance (in shares) at Mar. 28, 2020 | 27,636 | |||
Beginning balance at Mar. 28, 2020 | (155,909) | $ 276 | 0 | (156,185) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income (loss) | (12,630) | (12,630) | ||
Exercise of common stock options (in shares) | 33 | |||
Exercise of common stock options | 817 | 817 | ||
Stock-based compensation (in shares) | 71 | |||
Stock-based compensation | 5,033 | $ 1 | 5,032 | |
Repurchases of common stock (in shares) | (15) | |||
Repurchases of common stock | (329) | (330) | 1 | |
Ending balance (in shares) at Jun. 27, 2020 | 27,725 | |||
Ending balance at Jun. 27, 2020 | $ (163,018) | $ 277 | 5,519 | (168,814) |
Beginning balance (in shares) at Jan. 02, 2021 | 25,390 | 25,390 | ||
Beginning balance at Jan. 02, 2021 | $ (223,978) | $ 254 | 0 | (224,232) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income (loss) | 66,634 | 66,634 | ||
Exercise of common stock options (in shares) | 106 | |||
Exercise of common stock options | 2,460 | $ 1 | 2,459 | |
Stock-based compensation (in shares) | 314 | |||
Stock-based compensation | 6,416 | $ 3 | 6,413 | |
Repurchases of common stock (in shares) | (1,346) | |||
Repurchases of common stock | (184,182) | $ (13) | (8,872) | (175,297) |
Ending balance (in shares) at Apr. 03, 2021 | 24,464 | |||
Ending balance at Apr. 03, 2021 | $ (332,650) | $ 245 | 0 | (332,895) |
Beginning balance (in shares) at Jan. 02, 2021 | 25,390 | 25,390 | ||
Beginning balance at Jan. 02, 2021 | $ (223,978) | $ 254 | 0 | (224,232) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income (loss) | $ 88,884 | |||
Ending balance (in shares) at Jul. 03, 2021 | 23,622 | 23,622 | ||
Ending balance at Jul. 03, 2021 | $ (403,658) | $ 236 | 0 | (403,894) |
Beginning balance (in shares) at Apr. 03, 2021 | 24,464 | |||
Beginning balance at Apr. 03, 2021 | (332,650) | $ 245 | 0 | (332,895) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income (loss) | 22,250 | 22,250 | ||
Exercise of common stock options (in shares) | 35 | |||
Exercise of common stock options | 1,075 | 1,075 | ||
Stock-based compensation (in shares) | 22 | |||
Stock-based compensation | 5,969 | $ 0 | 5,969 | |
Repurchases of common stock (in shares) | (899) | |||
Repurchases of common stock | $ (100,302) | (7,044) | (93,249) | |
Ending balance (in shares) at Jul. 03, 2021 | 23,622 | 23,622 | ||
Ending balance at Jul. 03, 2021 | $ (403,658) | $ 236 | $ 0 | $ (403,894) |
Condensed Consolidated Statem_3
Condensed Consolidated Statement of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jul. 03, 2021 | Jun. 27, 2020 | |
Cash flows from operating activities: | ||
Net income | $ 88,884 | $ 26,510 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 29,800 | 30,811 |
Stock-based compensation | 12,385 | 7,084 |
Net loss on disposals and impairments of assets | 78 | 224 |
Deferred income taxes | 421 | 4,383 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 8,666 | 4,224 |
Inventories | (7,215) | 5,391 |
Income taxes | (11,625) | 2,508 |
Prepaid expenses and other assets | (13,407) | 7,018 |
Accounts payable | 23,232 | (14,804) |
Customer prepayments | 47,418 | 16,987 |
Accrued compensation and benefits | (22,387) | (7,405) |
Other taxes and withholding | 487 | (3,594) |
Other accruals and liabilities | 4,683 | 7,664 |
Net cash provided by operating activities | 161,420 | 87,001 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (32,012) | (21,695) |
Proceeds from sales of property and equipment | 12 | 25 |
Purchase of intangible assets | 0 | (945) |
Net cash used in investing activities | (32,000) | (22,615) |
Cash flows from financing activities: | ||
Repurchases of common stock | (280,915) | (41,774) |
Net increase (decrease) in short-term borrowings | 146,447 | (26,364) |
Proceeds from issuance of common stock | 3,535 | 4,100 |
Debt issuance costs | (557) | (290) |
Net cash used in financing activities | (131,490) | (64,328) |
Net (decrease) increase in cash and cash equivalents | (2,070) | 58 |
Cash and cash equivalents, at beginning of period | 4,243 | 1,593 |
Cash and cash equivalents, at end of period | $ 2,173 | $ 1,651 |
Business and Summary of Signifi
Business and Summary of Significant Accounting Policies | 6 Months Ended |
Jul. 03, 2021 | |
Accounting Policies [Abstract] | |
Business and Summary of Significant Accounting Policies | Business and Summary of Significant Accounting Policies Business & Basis of Presentation We prepared the condensed consolidated financial statements as of and for the three and six months ended July 3, 2021 of Sleep Number Corporation and our 100%-owned subsidiaries (Sleep Number or the Company), without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) and they reflect, in the opinion of management, all normal recurring adjustments necessary to present fairly our financial position as of July 3, 2021 and January 2, 2021, and the consolidated results of operations and cash flows for the periods presented. Our historical and quarterly consolidated results of operations may not be indicative of the results that may be achieved for the full year or any future period. Additionally, based on the duration and severity of the current global situation involving the novel coronavirus (COVID-19) pandemic, including but not limited to general economic conditions, consumer confidence, store restrictions mandated by federal, state or local authorities and possible supply chain disruptions, the extent to which COVID-19 will impact our business and our consolidated financial results will depend on future developments, which are highly uncertain and cannot be predicted. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP) have been condensed or omitted pursuant to such rules and regulations. These condensed consolidated financial statements should be read in conjunction with our most recent audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended January 2, 2021 and other recent filings with the SEC. The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of sales, expenses and income taxes during the reporting period. Predicting future events is inherently an imprecise activity and, as such, requires the use of judgment. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. In addition, during the current environment involving COVID-19, predicting future events will be especially challenging for management. Changes in these estimates will be reflected in the consolidated financial statements in future periods and could be material. Our critical accounting policies consist of stock-based compensation, warranty liabilities and revenue recognition. The condensed consolidated financial statements include the accounts of Sleep Number Corporation and our 100%-owned subsidiaries. All significant intra-entity balances and transactions have been eliminated in consolidation. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jul. 03, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value MeasurementsAt July 3, 2021 and January 2, 2021, we had $17 million and $12 million, respectively, of debt and equity securities that fund our deferred compensation plan and are classified in other non-current assets. We also had corresponding deferred compensation plan liabilities of $17 million and $12 million at July 3, 2021 and January 2, 2021, respectively, which are included in other non-current liabilities. The majority of the debt and equity securities are Level 1 as they trade with sufficient frequency and volume to enable us to obtain pricing information on an ongoing basis. Unrealized gains/(losses) on the debt and equity securities offset those associated with the corresponding deferred compensation plan liabilities. |
Inventories
Inventories | 6 Months Ended |
Jul. 03, 2021 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consisted of the following (in thousands): July 3, January 2, Raw materials $ 7,730 $ 12,599 Work in progress 98 103 Finished goods 80,749 68,660 $ 88,577 $ 81,362 |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, Net | 6 Months Ended |
Jul. 03, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, Net | Goodwill and Intangible Assets, Net Goodwill and Indefinite-lived Intangible Assets Goodwill was $64 million at July 3, 2021 and January 2, 2021. Indefinite-lived trade name/trademarks totaled $1.4 million at July 3, 2021 and January 2, 2021. Definite-lived Intangible Assets The gross carrying amount of our developed technologies was $19 million at July 3, 2021 and January 2, 2021. Accumulated amortization was $14 million and $13 million at July 3, 2021 and January 2, 2021, respectively. Amortization expense for both the three months ended July 3, 2021 and June 27, 2020, was $0.5 million. Amortization expense for both the six months ended July 3, 2021 and June 27, 2020, was $1.1 million. The gross carrying amount of our patents, which were acquired in June 2020, was $2.0 million at July 3, 2021 and January 2, 2021, respectively. Accumulated amortization was $0.2 million and $0.1 million at July 3, 2021 and January 2, 2021, respectively. Amortization expense for the three and six months ended July 3, 2021 was $55 thousand and $0.1 million, respectively. Amortization expense for the three and six months ended June 27, 2020 was not significant. Annual amortization for definite-lived intangible assets for subsequent years are as follows (in thousands): 2021 (excluding the six months ended July 3, 2021) $ 1,201 2022 2,403 2023 1,431 2024 222 2025 226 2026 222 Thereafter 522 Total future amortization for definite-lived intangible assets $ 6,227 |
Credit Agreement
Credit Agreement | 6 Months Ended |
Jul. 03, 2021 | |
Debt Disclosure [Abstract] | |
Credit Agreement | Credit Agreement Our credit facility as of July 3, 2021, has a net aggregate commitment amount of $600 million. The credit facility is for general corporate purposes, to meet our seasonal working capital requirements and to repurchase our stock. The credit agreement provides the lenders with a collateral security interest in substantially all of our assets and those of our subsidiaries and requires us to comply with, among other things, a maximum leverage ratio (4.5x) and a minimum interest coverage ratio (3.0x). The credit agreement includes an accordion feature which allows us to increase the amount of the credit facility from $600 million to $800 million, subject to lenders' approval. Under the terms of the credit agreement, we pay a variable rate of interest and a commitment fee based on our leverage ratio. We were in compliance with all financial covenants as of July 3, 2021. The credit facility matures in February 2024. The following table summarizes our borrowings under the credit facility ($ in thousands): July 3, January 2, Outstanding borrowings $ 382,200 $ 244,200 Outstanding letters of credit $ 3,997 $ 3,997 Additional borrowing capacity $ 213,803 $ 201,803 Weighted-average interest rate 1.6 % 1.5 % |
Leases
Leases | 6 Months Ended |
Jul. 03, 2021 | |
Leases [Abstract] | |
Leases | Leases We lease our retail, office and manufacturing space under operating leases which, in addition to the minimum lease payments, may require payment of a proportionate share of the real estate taxes and certain building operating expenses. While our local market development approach generally results in long-term participation in given markets, our retail store leases generally provide for an initial lease term of five three Our operating lease costs include facility, vehicle and equipment lease costs, but exclude variable lease costs. Operating lease costs are recognized on a straight-line basis over the lease term, after consideration of rent escalations and rent holidays. The lease term for purposes of the calculation begins on the earlier of the lease commencement date or the date we take possession of the property. During lease renewal negotiations that extend beyond the original lease term, we estimate straight-line rent expense based on current market conditions. Variable lease costs are recorded when it is probable the cost has been incurred and the amount can be reasonably estimated. Future payments for real estate taxes and certain building operating expenses for which we are obligated are not included in operating lease costs. At July 3, 2021, our finance right-of-use assets and lease liabilities were not significant. Lease costs were as follows (in thousands): Three Months Ended Six Months Ended July 3, June 27, July 3, June 27, Operating lease costs (1) $ 24,352 $ 22,357 $ 47,991 $ 45,303 Variable lease costs $ 840 $ 263 $ 1,355 $ 275 ___________________________ (1) Includes short-term lease costs which are not significant. The maturities of operating lease liabilities as of July 3, 2021, were as follows (1) (in thousands): 2021 (excluding the six months ended July 3, 2021) $ 45,819 2022 85,828 2023 75,838 2024 64,013 2025 54,458 2026 43,974 Thereafter 92,392 Total operating lease payments (2) 462,322 Less: Interest 82,942 Present value of operating lease liabilities (3) $ 379,380 ___________________________ (1) During 2020, we deferred certain cash lease payments to future periods. At July 3, 2021, we had deferred cash rent payments of $1.6 million which are excluded from this table and are included in Other current liabilities and Other non-current liabilities. (2) Total operating lease payments exclude $78 million of legally binding minimum lease payments for leases signed but not yet commenced. (3) Includes the current portion of $68 million for operating lease liabilities. Other information related to operating leases was as follows: July 3, January 2, Weighted-average remaining lease term (years) 6.4 6.3 Weighted-average discount rate 6.5 % 6.9 % Six Months Ended (in thousands) July 3, June 27, Cash paid for amounts included in present value of operating lease liabilities $ 43,414 $ 42,773 Right-of-use assets obtained in exchange for operating lease liabilities $ 50,667 $ 17,670 |
Repurchases of Common Stock
Repurchases of Common Stock | 6 Months Ended |
Jul. 03, 2021 | |
Repurchases Of Common Stock [Abstract] | |
Repurchases of Common Stock | Repurchases of Common Stock Repurchases of our common stock were as follows (in thousands): Three Months Ended Six Months Ended July 3, June 27, July 3, June 27, Amount repurchased under Board-approved share repurchase program $ 100,015 $ — $ 267,433 $ 38,111 Amount repurchased in connection with the vesting of employee restricted stock grants 287 329 17,051 3,170 Total amount repurchased (based on trade dates) $ 100,302 $ 329 $ 284,484 $ 41,281 As of July 3, 2021, the remaining authorization under the $600 million share repurchase program was $500 million. |
Revenue Recognition
Revenue Recognition | 6 Months Ended |
Jul. 03, 2021 | |
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 3, January 2, Deferred Contract Assets included in: Other current assets $ 25,293 $ 26,593 Other non-current assets 45,998 37,976 $ 71,291 $ 64,569 July 3, January 2, Deferred Contract Liabilities included in: Other current liabilities $ 33,228 $ 35,288 Other non-current liabilities 59,813 49,689 $ 93,041 $ 84,977 The deferred revenue and costs related to SleepIQ technology are recognized on a straight-line basis over the product's estimated life of 4.5 years because our inputs are generally expended evenly throughout the performance period. During the three months ended July 3, 2021 and June 27, 2020, we recognized revenue of $8 million and $10 million, respectively, that were included in the deferred contract liability balances at the beginning of the respective periods. During the six months ended July 3, 2021 and June 27, 2020, we recognized revenue of $15 million and $18 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 3, 2021 and 97% of our revenues for the three and six months ended June 27, 2020. Net sales were as follows (in thousands): Three Months Ended Six Months Ended July 3, June 27, July 3, June 27, Retail stores $ 426,653 $ 206,476 $ 915,841 $ 643,125 Online, phone, chat and other 57,663 78,462 136,731 114,379 Total Company $ 484,316 $ 284,938 $ 1,052,572 $ 757,504 Obligation for Sales Returns The activity in the sales returns liability account was as follows (in thousands): Six Months Ended July 3, June 27, Balance at beginning of year $ 24,765 $ 19,809 Additions that reduce net sales 42,272 30,901 Deductions from reserves (45,820) (33,514) Balance at end of period $ 21,217 $ 17,196 |
Stock-based Compensation Expens
Stock-based Compensation Expense | 6 Months Ended |
Jul. 03, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Stock-based Compensation Expense | Stock-based Compensation Expense Total stock-based compensation expense was as follows (in thousands): Three Months Ended Six Months Ended July 3, June 27, July 3, June 27, Stock awards $ 5,218 $ 4,440 11,027 $ 5,846 Stock options 750 593 1,358 1,238 Total stock-based compensation expense (1) 5,968 5,033 12,385 7,084 Income tax benefit 1,473 1,218 3,071 1,714 Total stock-based compensation expense, net of tax $ 4,495 $ 3,815 $ 9,314 $ 5,370 ___________________________ (1) Changes in stock-based compensation expense reflect the cumulative impact of the change in the expected achievements of certain performance targets. |
Profit Sharing and 401(k) Plan
Profit Sharing and 401(k) Plan | 6 Months Ended |
Jul. 03, 2021 | |
Profit Sharing And 401 (k) Plan [Abstract] | |
Profit Sharing and 401(k) Plan | Profit Sharing and 401(k) PlanUnder our profit sharing and 401(k) plan, eligible employees may defer up to 50% of their compensation on a pre-tax basis, subject to Internal Revenue Service limitations. Each pay period, we may make a discretionary contribution equal to a percentage of the employee’s contribution. During the three months ended July 3, 2021 and June 27, 2020, our contributions, net of forfeitures, were $1.8 million and $0.5 million, respectively. During the six months ended July 3, 2021 and June 27, 2020, our contributions, net of forfeitures, were $3.7 million and $2.1 million, respectively. |
Net Income (Loss) per Common Sh
Net Income (Loss) per Common Share | 6 Months Ended |
Jul. 03, 2021 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) per Common Share | Net Income (Loss) per Common Share The components of basic and diluted net income (loss) per share were as follows (in thousands, except per share amounts): Three Months Ended Six Months Ended July 3, June 27, July 3, June 27, Net income (loss) $ 22,250 $ (12,630) $ 88,884 $ 26,510 Reconciliation of weighted-average shares outstanding: Basic weighted-average shares outstanding 24,371 27,923 24,874 27,890 Dilutive effect of stock-based awards 823 — 995 633 Diluted weighted-average shares outstanding 25,194 27,923 25,869 28,523 Net income (loss) per share – basic $ 0.91 $ (0.45) $ 3.57 $ 0.95 Net income (loss) per share – diluted $ 0.88 $ (0.45) $ 3.44 $ 0.93 For the three and six months ended July 3, 2021 and the six months ended June 27, 2020, anti-dilutive stock-based awards excluded from the diluted net income per share calculations were immaterial. For the three months ended June 27, 2020, potentially dilutive stock-based awards have been excluded from the calculation of diluted weighted-average shares outstanding, as their inclusion would have had an anti-dilutive effect on our net loss per diluted share. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jul. 03, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Warranty Liabilities The activity in the accrued warranty liabilities account was as follows (in thousands): Six Months Ended July 3, June 27, Balance at beginning of year $ 12,152 $ 11,345 Additions charged to costs and expenses for current-year sales 7,863 4,965 Deductions from reserves (9,235) (4,789) Changes in liability for pre-existing warranties during the current year, including expirations (237) (89) Balance at end of period $ 10,543 $ 11,432 Legal Proceedings We are involved from time to time in various legal proceedings arising in the ordinary course of our business, including primarily commercial, product liability, employment and intellectual property claims. In accordance with U.S. generally accepted accounting principles, we record a liability in our consolidated financial statements with respect to any of these matters when it is both probable that a liability has been incurred and the amount of the liability can be reasonably estimated. If a material loss is reasonably possible but not known or probable, and may be reasonably estimated, the estimated loss or range of loss is disclosed. With respect to currently pending legal proceedings, we have not established an estimated range of reasonably possible material losses either because we believe that we have valid defenses to claims asserted against us, the proceeding has not advanced to a stage of discovery that would enable us to establish an estimate, or the potential loss is not material. We currently do not expect the outcome of pending legal proceedings to have a material effect on our consolidated results of operations, financial position or cash flows. Litigation, however, is inherently unpredictable, and it is possible that the ultimate outcome of one or more claims asserted against us could adversely impact our consolidated results of operations, financial position or cash flows. We expense legal costs as incurred. On March 27, 2018, Level Sleep, LLC (Level Sleep) filed a patent infringement lawsuit against Sleep Number in the Federal District Court for the Eastern District of Texas. In its Complaint, Level Sleep claims that Sleep Number infringed two patents owned by Level Sleep, U.S. Patent Nos. 6,807,698 and 7,036,172 (the Patents), by, among other things, making, using, offering for sale, or selling within the United States, and/or importing into the United States, beds with sleep surfaces having foam with multiple zones in the longitudinal direction. Level Sleep has asserted that five non-360 ® beds no longer sold and two current non-360 beds infringe the |
COVID-19 Pandemic
COVID-19 Pandemic | 6 Months Ended |
Jul. 03, 2021 | |
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. The COVID-19 pandemic mainly impacted our second quarter of 2020 financial performance, as we generated strong financial performance during the full-year of 2020 and the first six months of 2021. However, the pandemic's future effect on consumer demand and our ongoing financial performance remains uncertain. See Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations of this Quarterly Report on Form 10-Q and Part I: Item 1A. Risk Factors in our Annual Report on Form 10-K for the fiscal year ended January 2, 2021, for additional discussion on the COVID-19 pandemic and the impact on our business. |
Business and Summary of Signi_2
Business and Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jul. 03, 2021 | |
Accounting Policies [Abstract] | |
Business and Basis of Presentation | Business & Basis of Presentation We prepared the condensed consolidated financial statements as of and for the three and six months ended July 3, 2021 of Sleep Number Corporation and our 100%-owned subsidiaries (Sleep Number or the Company), without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) and they reflect, in the opinion of management, all normal recurring adjustments necessary to present fairly our financial position as of July 3, 2021 and January 2, 2021, and the consolidated results of operations and cash flows for the periods presented. Our historical and quarterly consolidated results of operations may not be indicative of the results that may be achieved for the full year or any future period. Additionally, based on the duration and severity of the current global situation involving the novel coronavirus (COVID-19) pandemic, including but not limited to general economic conditions, consumer confidence, store restrictions mandated by federal, state or local authorities and possible supply chain disruptions, the extent to which COVID-19 will impact our business and our consolidated financial results will depend on future developments, which are highly uncertain and cannot be predicted. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP) have been condensed or omitted pursuant to such rules and regulations. These condensed consolidated financial statements should be read in conjunction with our most recent audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended January 2, 2021 and other recent filings with the SEC. |
Use of Estimates | The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of sales, expenses and income taxes during the reporting period. Predicting future events is inherently an imprecise activity and, as such, requires the use of judgment. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. In addition, during the current environment involving COVID-19, predicting future events will be especially challenging for management. Changes in these estimates will be reflected in the consolidated financial statements in future periods and could be material. Our critical accounting policies consist of stock-based compensation, warranty liabilities and revenue recognition. |
Consolidation | The condensed consolidated financial statements include the accounts of Sleep Number Corporation and our 100%-owned subsidiaries. All significant intra-entity balances and transactions have been eliminated in consolidation. |
Leases | We lease our retail, office and manufacturing space under operating leases which, in addition to the minimum lease payments, may require payment of a proportionate share of the real estate taxes and certain building operating expenses. While our local market development approach generally results in long-term participation in given markets, our retail store leases generally provide for an initial lease term of five three Our operating lease costs include facility, vehicle and equipment lease costs, but exclude variable lease costs. Operating lease costs are recognized on a straight-line basis over the lease term, after consideration of rent escalations and rent holidays. The lease term for purposes of the calculation begins on the earlier of the lease commencement date or the date we take possession of the property. During lease renewal negotiations that extend beyond the original lease term, we estimate straight-line rent expense based on current market conditions. Variable lease costs are recorded when it is probable the cost has been incurred and the amount can be reasonably estimated. Future payments for real estate taxes and certain building operating expenses for which we are obligated are not included in operating lease costs. |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jul. 03, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories consisted of the following (in thousands): July 3, January 2, Raw materials $ 7,730 $ 12,599 Work in progress 98 103 Finished goods 80,749 68,660 $ 88,577 $ 81,362 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets, Net (Tables) | 6 Months Ended |
Jul. 03, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Annual Amortization of Definite-Lived Tangible Assets | Annual amortization for definite-lived intangible assets for subsequent years are as follows (in thousands): 2021 (excluding the six months ended July 3, 2021) $ 1,201 2022 2,403 2023 1,431 2024 222 2025 226 2026 222 Thereafter 522 Total future amortization for definite-lived intangible assets $ 6,227 |
Credit Agreement (Tables)
Credit Agreement (Tables) | 6 Months Ended |
Jul. 03, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Borrowings Under Credit Facility | The following table summarizes our borrowings under the credit facility ($ in thousands): July 3, January 2, Outstanding borrowings $ 382,200 $ 244,200 Outstanding letters of credit $ 3,997 $ 3,997 Additional borrowing capacity $ 213,803 $ 201,803 Weighted-average interest rate 1.6 % 1.5 % |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jul. 03, 2021 | |
Leases [Abstract] | |
Schedule of Operating Lease Costs | Lease costs were as follows (in thousands): Three Months Ended Six Months Ended July 3, June 27, July 3, June 27, Operating lease costs (1) $ 24,352 $ 22,357 $ 47,991 $ 45,303 Variable lease costs $ 840 $ 263 $ 1,355 $ 275 ___________________________ (1) Includes short-term lease costs which are not significant. |
Schedule of Maturities of Operating Lease Liabilities | The maturities of operating lease liabilities as of July 3, 2021, were as follows (1) (in thousands): 2021 (excluding the six months ended July 3, 2021) $ 45,819 2022 85,828 2023 75,838 2024 64,013 2025 54,458 2026 43,974 Thereafter 92,392 Total operating lease payments (2) 462,322 Less: Interest 82,942 Present value of operating lease liabilities (3) $ 379,380 ___________________________ (1) During 2020, we deferred certain cash lease payments to future periods. At July 3, 2021, we had deferred cash rent payments of $1.6 million which are excluded from this table and are included in Other current liabilities and Other non-current liabilities. (2) Total operating lease payments exclude $78 million of legally binding minimum lease payments for leases signed but not yet commenced. (3) Includes the current portion of $68 million for operating lease liabilities. |
Schedule of Other Information Related Operating Leases | Other information related to operating leases was as follows: July 3, January 2, Weighted-average remaining lease term (years) 6.4 6.3 Weighted-average discount rate 6.5 % 6.9 % Six Months Ended (in thousands) July 3, June 27, Cash paid for amounts included in present value of operating lease liabilities $ 43,414 $ 42,773 Right-of-use assets obtained in exchange for operating lease liabilities $ 50,667 $ 17,670 |
Repurchases of Common Stock (Ta
Repurchases of Common Stock (Tables) | 6 Months Ended |
Jul. 03, 2021 | |
Repurchases Of Common Stock [Abstract] | |
Schedule of Repurchases of Common Stock | Repurchases of our common stock were as follows (in thousands): Three Months Ended Six Months Ended July 3, June 27, July 3, June 27, Amount repurchased under Board-approved share repurchase program $ 100,015 $ — $ 267,433 $ 38,111 Amount repurchased in connection with the vesting of employee restricted stock grants 287 329 17,051 3,170 Total amount repurchased (based on trade dates) $ 100,302 $ 329 $ 284,484 $ 41,281 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 6 Months Ended |
Jul. 03, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Deferred Contract Liabilities and Deferred Contract Assets | Deferred contract assets and deferred contract liabilities are included in our condensed consolidated balance sheets as follows (in thousands): July 3, January 2, Deferred Contract Assets included in: Other current assets $ 25,293 $ 26,593 Other non-current assets 45,998 37,976 $ 71,291 $ 64,569 July 3, January 2, Deferred Contract Liabilities included in: Other current liabilities $ 33,228 $ 35,288 Other non-current liabilities 59,813 49,689 $ 93,041 $ 84,977 |
Disaggregation of Revenue | Net sales were as follows (in thousands): Three Months Ended Six Months Ended July 3, June 27, July 3, June 27, Retail stores $ 426,653 $ 206,476 $ 915,841 $ 643,125 Online, phone, chat and other 57,663 78,462 136,731 114,379 Total Company $ 484,316 $ 284,938 $ 1,052,572 $ 757,504 |
Schedule of Sales Return Liability | The activity in the sales returns liability account was as follows (in thousands): Six Months Ended July 3, June 27, Balance at beginning of year $ 24,765 $ 19,809 Additions that reduce net sales 42,272 30,901 Deductions from reserves (45,820) (33,514) Balance at end of period $ 21,217 $ 17,196 |
Stock-based Compensation Expe_2
Stock-based Compensation Expense (Tables) | 6 Months Ended |
Jul. 03, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Stock-Based Compensation Expense | Total stock-based compensation expense was as follows (in thousands): Three Months Ended Six Months Ended July 3, June 27, July 3, June 27, Stock awards $ 5,218 $ 4,440 11,027 $ 5,846 Stock options 750 593 1,358 1,238 Total stock-based compensation expense (1) 5,968 5,033 12,385 7,084 Income tax benefit 1,473 1,218 3,071 1,714 Total stock-based compensation expense, net of tax $ 4,495 $ 3,815 $ 9,314 $ 5,370 ___________________________ (1) Changes in stock-based compensation expense reflect the cumulative impact of the change in the expected achievements of certain performance targets. |
Net Income (Loss) per Common _2
Net Income (Loss) per Common Share (Tables) | 6 Months Ended |
Jul. 03, 2021 | |
Earnings Per Share [Abstract] | |
Components of Basic and Diluted Net (Loss) Income per Share | The components of basic and diluted net income (loss) per share were as follows (in thousands, except per share amounts): Three Months Ended Six Months Ended July 3, June 27, July 3, June 27, Net income (loss) $ 22,250 $ (12,630) $ 88,884 $ 26,510 Reconciliation of weighted-average shares outstanding: Basic weighted-average shares outstanding 24,371 27,923 24,874 27,890 Dilutive effect of stock-based awards 823 — 995 633 Diluted weighted-average shares outstanding 25,194 27,923 25,869 28,523 Net income (loss) per share – basic $ 0.91 $ (0.45) $ 3.57 $ 0.95 Net income (loss) per share – diluted $ 0.88 $ (0.45) $ 3.44 $ 0.93 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jul. 03, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Warranty Liabilities | The activity in the accrued warranty liabilities account was as follows (in thousands): Six Months Ended July 3, June 27, Balance at beginning of year $ 12,152 $ 11,345 Additions charged to costs and expenses for current-year sales 7,863 4,965 Deductions from reserves (9,235) (4,789) Changes in liability for pre-existing warranties during the current year, including expirations (237) (89) Balance at end of period $ 10,543 $ 11,432 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Level 1 - USD ($) $ in Millions | Jul. 03, 2021 | Jan. 02, 2021 |
Other non-current assets | Available-for-sale securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities assets funding the deferred compensation plan | $ 17 | $ 12 |
Other non-current liabilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation plan liability | $ 17 | $ 12 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Jul. 03, 2021 | Jan. 02, 2021 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 7,730 | $ 12,599 |
Work in progress | 98 | 103 |
Finished goods | 80,749 | 68,660 |
Inventories | $ 88,577 | $ 81,362 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets, Net - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 03, 2021 | Jun. 27, 2020 | Jul. 03, 2021 | Jan. 02, 2021 | |
Goodwill And Intangible Assets [Line Items] | ||||
Goodwill | $ 64,000 | $ 64,000 | $ 64,000 | |
Developed Technologies | ||||
Goodwill And Intangible Assets [Line Items] | ||||
Gross carrying amount | 19,000 | 19,000 | 19,000 | |
Accumulated amortization | 14,000 | 14,000 | 13,000 | |
Amortization expense | 500 | $ 500 | 1,100 | |
Patents | ||||
Goodwill And Intangible Assets [Line Items] | ||||
Gross carrying amount | 2,000 | 2,000 | 2,000 | |
Accumulated amortization | 200 | 200 | 100 | |
Amortization expense | 55 | 100 | ||
Trade Names | ||||
Goodwill And Intangible Assets [Line Items] | ||||
Indefinite-lived trade name/trademarks | $ 1,400 | $ 1,400 | $ 1,400 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets, Net - Annual Amortization for Definite-Lived Intangible (Details) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jul. 03, 2021USD ($) | Jul. 03, 2021USD ($) | |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
2021 (excluding the six months ended July 3, 2021) | $ 1,201 | $ 1,201 |
2022 | 2,403 | 2,403 |
2023 | 1,431 | 1,431 |
2024 | 222 | 222 |
2025 | 226 | 226 |
2026 | 222 | 222 |
Thereafter | 522 | 522 |
Total future amortization for definite-lived intangible assets | 6,227 | 6,227 |
Patents | ||
Goodwill And Intangible Assets [Line Items] | ||
Amortization expense | $ 55 | $ 100 |
Credit Agreement - Additional I
Credit Agreement - Additional Information (Details) - USD ($) $ in Millions | Jul. 03, 2021 | Jan. 02, 2021 |
Debt Disclosure [Abstract] | ||
Current borrowing capacity | $ 600 | |
Maximum leverage ratio | 450.00% | |
Minimum interest coverage ratio | 300.00% | |
Total commitment amount | $ 800 | $ 600 |
Credit Agreement - Schedule of
Credit Agreement - Schedule of Borrowings Under Credit Facility (Details) - USD ($) $ in Thousands | Jul. 03, 2021 | Jan. 02, 2021 |
Debt Disclosure [Abstract] | ||
Outstanding borrowings | $ 382,200 | $ 244,200 |
Outstanding letters of credit | 3,997 | 3,997 |
Additional borrowing capacity | $ 213,803 | $ 201,803 |
Weighted-average interest rate | 1.60% | 1.50% |
Leases - Additional Information
Leases - Additional Information (Details) | Jul. 03, 2021 |
Minimum | Retail Store Leases | |
Lessee, Lease, Description [Line Items] | |
Lease term | 5 years |
Minimum | Lease Vehicles and Certain Equipment Under Operating Leases | |
Lessee, Lease, Description [Line Items] | |
Lease term | 3 years |
Maximum | Retail Store Leases | |
Lessee, Lease, Description [Line Items] | |
Lease term | 10 years |
Maximum | Office and Manufacturing Leases | |
Lessee, Lease, Description [Line Items] | |
Lease term | 15 years |
Maximum | Lease Vehicles and Certain Equipment Under Operating Leases | |
Lessee, Lease, Description [Line Items] | |
Lease term | 5 years |
Leases - Schedule of Operating
Leases - Schedule of Operating Lease Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 03, 2021 | Jun. 27, 2020 | Jul. 03, 2021 | Jun. 27, 2020 | |
Leases [Abstract] | ||||
Operating lease costs | $ 24,352 | $ 22,357 | $ 47,991 | $ 45,303 |
Variable lease costs | $ 840 | $ 263 | $ 1,355 | $ 275 |
Leases - Schedule of Maturities
Leases - Schedule of Maturities of Operating Lease Liabilities (Details) - USD ($) $ in Thousands | Jul. 03, 2021 | Jan. 02, 2021 |
Leases [Abstract] | ||
2021 (excluding the six months ended July 3, 2021) | $ 45,819 | |
2022 | 85,828 | |
2023 | 75,838 | |
2024 | 64,013 | |
2025 | 54,458 | |
2026 | 43,974 | |
Thereafter | 92,392 | |
Total lease payments | 462,322 | |
Less: Interest | 82,942 | |
Present value of operating lease liabilities | 379,380 | |
Amount of lease payments deferred due to COVID-19 | 1,600 | |
Amount leases executed, not yet commenced, excluded from table. | 78,000 | |
Operating lease liabilities, current | $ 67,648 | $ 62,077 |
Leases - Schedule of Other Info
Leases - Schedule of Other Information Related Operating Leases (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jul. 03, 2021 | Jun. 27, 2020 | Jan. 02, 2021 | |
Leases [Abstract] | |||
Weighted-average remaining lease term (years) | 6 years 4 months 24 days | 6 years 3 months 18 days | |
Weighted-average discount rate | 6.50% | 6.90% | |
Cash paid for amounts included in present value of operating lease liabilities | $ 43,414 | $ 42,773 | |
Right-of-use assets obtained in exchange for operating lease liabilities | $ 50,667 | $ 17,670 |
Repurchases of Common Stock - S
Repurchases of Common Stock - Schedule of Repurchase of Common Stock (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 03, 2021 | Jun. 27, 2020 | Jul. 03, 2021 | Jun. 27, 2020 | |
Repurchases Of Common Stock [Abstract] | ||||
Amount repurchased under Board-approved share repurchase program | $ 100,015 | $ 0 | $ 267,433 | $ 38,111 |
Amount repurchased in connection with the vesting of employee restricted stock grants | 287 | 329 | 17,051 | 3,170 |
Total amount repurchased (based on trade dates) | $ 100,302 | $ 329 | $ 284,484 | $ 41,281 |
Repurchases of Common Stock - A
Repurchases of Common Stock - Additional Information (Details) $ in Millions | Jul. 03, 2021USD ($) |
Repurchases Of Common Stock [Abstract] | |
Authorized share repurchase program | $ 600 |
Remaining authorized stock purchase plan | $ 500 |
Revenue Recognition - Schedule
Revenue Recognition - Schedule of Deferred Contract Assets and Deferred Contract Liabilities (Details) - USD ($) $ in Thousands | Jul. 03, 2021 | Jan. 02, 2021 |
Deferred Contract Assets included in: | ||
Deferred contract assets | $ 71,291 | $ 64,569 |
Deferred Contract Liabilities included in: | ||
Deferred contract liabilities | 93,041 | 84,977 |
Other current assets | ||
Deferred Contract Assets included in: | ||
Other current assets | 25,293 | 26,593 |
Other non-current assets | ||
Deferred Contract Assets included in: | ||
Other non-current assets | 45,998 | 37,976 |
Other current liabilities | ||
Deferred Contract Liabilities included in: | ||
Other current liabilities | 33,228 | 35,288 |
Other non-current liabilities | ||
Deferred Contract Liabilities included in: | ||
Other non-current liabilities | $ 59,813 | $ 49,689 |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 03, 2021 | Jun. 27, 2020 | Jul. 03, 2021 | Jun. 27, 2020 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue recognized, included in beginning deferred contract liability balance | $ 8 | $ 10 | $ 15 | $ 18 |
SleepIQ Technology | ||||
Disaggregation of Revenue [Line Items] | ||||
Estimated product life | 4 years 6 months | |||
Transferred at Point in Time | Revenue from Contract with Customer Benchmark | Timing of Transfer of Goods or Services Concentration Risk | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue recognized at a point in time | 98.00% | 97.00% | 98.00% | 97.00% |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 03, 2021 | Jun. 27, 2020 | Jul. 03, 2021 | Jun. 27, 2020 | |
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 484,316 | $ 284,938 | $ 1,052,572 | $ 757,504 |
Retail stores | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 426,653 | 206,476 | 915,841 | 643,125 |
Online, phone, chat and other | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 57,663 | $ 78,462 | $ 136,731 | $ 114,379 |
Revenue Recognition - Schedul_2
Revenue Recognition - Schedule of Sales Return Liability (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jul. 03, 2021 | Jun. 27, 2020 | |
Sales Return Liability [Roll Forward] | ||
Balance at beginning of year | $ 24,765 | $ 19,809 |
Additions that reduce net sales | 42,272 | 30,901 |
Deductions from reserves | (45,820) | (33,514) |
Balance at end of period | $ 21,217 | $ 17,196 |
Stock-based Compensation Expe_3
Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 03, 2021 | Jun. 27, 2020 | Jul. 03, 2021 | Jun. 27, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock based compensation expense | $ 5,968 | $ 5,033 | $ 12,385 | $ 7,084 |
Income tax benefit | 1,473 | 1,218 | 3,071 | 1,714 |
Total stock-based compensation expense, net of tax | 4,495 | 3,815 | 9,314 | 5,370 |
Stock awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock based compensation expense | 5,218 | 4,440 | 11,027 | 5,846 |
Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock based compensation expense | $ 750 | $ 593 | $ 1,358 | $ 1,238 |
Profit Sharing and 401(k) Plan
Profit Sharing and 401(k) Plan (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 03, 2021 | Jun. 27, 2020 | Jul. 03, 2021 | Jun. 27, 2020 | |
Profit Sharing And 401 (k) Plan [Abstract] | ||||
Employee compensation deferral (as a percent) | 50.00% | |||
Employer contributions | $ 1.8 | $ 0.5 | $ 3.7 | $ 2.1 |
Net Income (Loss) per Common _3
Net Income (Loss) per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jul. 03, 2021 | Apr. 03, 2021 | Jun. 27, 2020 | Mar. 28, 2020 | Jul. 03, 2021 | Jun. 27, 2020 | |
Earnings Per Share [Abstract] | ||||||
Net income (loss) | $ 22,250 | $ 66,634 | $ (12,630) | $ 39,140 | $ 88,884 | $ 26,510 |
Reconciliation of weighted-average shares outstanding: | ||||||
Basic weighted-average shares outstanding (in shares) | 24,371,000 | 27,923,000 | 24,874,000 | 27,890,000 | ||
Dilutive effect of stock-based awards (in shares) | 823,000 | 0 | 995,000 | 633,000 | ||
Diluted weighted-average shares outstanding (in shares) | 25,194,000 | 27,923,000 | 25,869,000 | 28,523,000 | ||
Net income per share – basic (in dollars per share) | $ 0.91 | $ (0.45) | $ 3.57 | $ 0.95 | ||
Net income per share – diluted (in dollars per share) | $ 0.88 | $ (0.45) | $ 3.44 | $ 0.93 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jul. 03, 2021 | Jun. 27, 2020 | |
Warranty Liabilities [Roll Forward] | ||
Balance at beginning of year | $ 12,152 | $ 11,345 |
Additions charged to costs and expenses for current-year sales | 7,863 | 4,965 |
Deductions from reserves | (9,235) | (4,789) |
Changes in liability for pre-existing warranties during the current year, including expirations | (237) | (89) |
Balance at end of period | $ 10,543 | $ 11,432 |
COVID-19 Pandemic (Details)
COVID-19 Pandemic (Details) | 3 Months Ended |
Jun. 27, 2020 | |
Average | |
Unusual or Infrequent Item, or Both [Line Items] | |
Percentage of stores that are closed | 47.00% |