Sleep Number Corp Revenue Disclosure
(9) Revenue Recognition
Deferred contract assets and deferred contract liabilities are included in our consolidated balance sheets as follows (in thousands):
|
|
|
December 28, 2019 |
|
|
December 29, 2018 |
|
||
|
Deferred Contract Assets included in: |
|
|
|
|
|
|
|
|
|
Other current assets |
|
$ |
23,568 |
|
|
$ |
20,553 |
|
|
Other non-current assets |
|
|
33,782 |
|
|
|
29,456 |
|
|
|
|
$ |
57,350 |
|
|
$ |
50,009 |
|
|
|
|
December 28, 2019 |
|
|
December 29, 2018 |
|
||
|
Deferred Contract Liabilities included in: |
|
|
|
|
|
|
|
|
|
Other current liabilities |
|
$ |
34,204 |
|
|
$ |
32,395 |
|
|
Other non-current liabilities |
|
|
44,970 |
|
|
|
42,194 |
|
|
|
|
$ |
79,174 |
|
|
$ |
74,589 |
|
During the year ended December 28, 2019, we recognized revenue of $32 million that was included in the deferred contract liability balance at the beginning of the year.
Revenue from goods and services transferred to customers at a point in time accounted for approximately 98% of our revenues for 2019, 2018 and 2017.
Net sales from each of our channels was as follows (in thousands):
|
|
|
2019 |
|
|
2018 |
|
|
2017 |
|
|||
|
Retail |
|
$ |
1,558,638 |
|
|
$ |
1,401,991 |
|
|
$ |
1,324,690 |
|
|
Online and phone |
|
|
129,257 |
|
|
|
115,831 |
|
|
|
101,145 |
|
|
Company-Controlled channel |
|
|
1,687,895 |
|
|
|
1,517,822 |
|
|
|
1,425,835 |
|
|
Wholesale/Other channel |
|
|
10,457 |
|
|
|
13,753 |
|
|
|
18,662 |
|
|
Total |
|
$ |
1,698,352 |
|
|
$ |
1,531,575 |
|
|
$ |
1,444,497 |
|
Obligation for Sales Returns
The activity in the sales returns liability account for 2019 and 2018 was as follows (in thousands):
|
|
|
2019 |
|
|
2018 |
|
||
|
Balance at beginning of year |
|
$ |
19,907 |
|
|
$ |
19,270 |
|
|
Additions that reduce net sales |
|
|
79,138 |
|
|
|
79,326 |
|
|
Deduction from reserves |
|
|
(79,236 |
) |
|
|
(78,689 |
) |
|
Balance at end of period |
|
$ |
19,809 |
|
|
$ |
19,907 |
|
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About Revenue Disclosures
Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.
Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.