Sleep Number (SNBR) 10-Q 8 Nov 23 2023 Q3 Quarterly report Financial data

Cover Page

Cover Page	9 Months Ended
	Sep. 30, 2023 shares
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2023
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	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding	22,228,000
Entity Central Index Key	0000827187
Current Fiscal Year End Date	--12-30
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q3
Amendment Flag	false

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 906	$ 1,792
Accounts receivable, net of allowances of $1,408 and $1,267, respectively	18,631	26,005
Inventories	116,224	114,034
Prepaid expenses	21,076	16,006
Other current assets	41,230	39,921
Total current assets	198,067	197,758
Non-current assets:
Property and equipment, net	190,707	200,605
Operating lease right-of-use assets	401,564	397,755
Goodwill and intangible assets, net	66,690	68,065
Deferred income taxes	21,391	7,958
Other non-current assets	82,616	81,795
Total assets	961,035	953,936
Current liabilities:
Borrowings under revolving credit facility	488,000	459,600
Accounts payable	168,883	176,207
Customer prepayments	45,902	73,181
Accrued sales returns	23,012	25,594
Compensation and benefits	24,281	31,291
Taxes and withholding	27,198	23,622
Operating lease liabilities	83,143	79,533
Other current liabilities	58,907	60,785
Total current liabilities	919,326	929,813
Non-current liabilities:
Operating lease liabilities	356,579	356,879
Other non-current liabilities	105,817	105,421
Total liabilities	1,381,722	1,392,113
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, 22,228 and 22,014 shares issued and outstanding, respectively	222	220
Additional paid-in capital	12,769	5,182
Accumulated deficit	(433,678)	(443,579)
Total shareholders’ deficit	(420,687)	(438,177)
Total liabilities and shareholders’ deficit	$ 961,035	$ 953,936

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Current assets:
Allowances	$ 1,408	$ 1,267
Shareholders’ deficit:
Undesignated preferred stock, shares authorized (in shares)	5,000,000	5,000,000
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)	22,228,000	22,014,000
Common stock, shares outstanding (in shares)	22,228,000	22,014,000

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Oct. 01, 2022	Sep. 30, 2023	Oct. 01, 2022
Income Statement [Abstract]
Net sales	$ 472,648	$ 540,566	$ 1,457,964	$ 1,616,769
Cost of sales	201,537	237,479	612,343	686,439
Gross profit	271,111	303,087	845,621	930,330
Operating expenses:
Sales and marketing	221,143	239,656	649,410	700,405
General and administrative	31,948	36,003	111,144	116,049
Research and development	12,633	14,786	42,521	46,908
Total operating expenses	265,724	290,445	803,075	863,362
Operating income	5,387	12,642	42,546	66,968
Interest expense, net	10,958	5,606	30,008	11,352
(Loss) Income before income taxes	(5,571)	7,036	12,538	55,616
Income tax (benefit) expense	(3,253)	2,003	2,637	13,576
Net (loss) income	$ (2,318)	$ 5,033	$ 9,901	$ 42,040
Basic net (loss) income per share:
Net (loss) income per share – basic (in dollars per share)	$ (0.10)	$ 0.23	$ 0.44	$ 1.87
Weighted-average shares – basic (in shares)	22,479,000	22,218,000	22,412,000	22,444,000
Diluted net (loss) income per share:
Net (loss) income per share – diluted (in dollars per share)	$ (0.10)	$ 0.22	$ 0.44	$ 1.83
Weighted-average shares – diluted (in shares)	22,479,000	22,573,000	22,558,000	22,959,000

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 Jan. 01, 2022		22,683
Beginning balance at Jan. 01, 2022	$ (424,953)	$ 227	$ 3,971	$ (429,151)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	2,074			2,074
Exercise of common stock options (in shares)		21
Exercise of common stock options	531		531
Stock-based compensation (in shares)		341
Stock-based compensation	4,133	$ 3	4,130
Repurchases of common stock (in shares)		(813)
Repurchases of common stock	(50,998)	$ (8)	(8,632)	(42,358)
Ending balance (in shares) at Apr. 02, 2022		22,232
Ending balance at Apr. 02, 2022	(469,213)	$ 222	0	(469,435)
Beginning balance (in shares) at Jan. 01, 2022		22,683
Beginning balance at Jan. 01, 2022	(424,953)	$ 227	3,971	(429,151)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	42,040
Ending balance (in shares) at Oct. 01, 2022		22,001
Ending balance at Oct. 01, 2022	(437,471)	$ 220	458	(438,149)
Beginning balance (in shares) at Apr. 02, 2022		22,232
Beginning balance at Apr. 02, 2022	(469,213)	$ 222	0	(469,435)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	34,933			34,933
Exercise of common stock options (in shares)		2
Exercise of common stock options	54		54
Stock-based compensation (in shares)		26
Stock-based compensation	3,910	$ 1	3,909
Repurchases of common stock (in shares)		(296)
Repurchases of common stock	(12,646)	$ (3)	(3,963)	(8,680)
Ending balance (in shares) at Jul. 02, 2022		21,964
Ending balance at Jul. 02, 2022	(442,962)	$ 220	0	(443,182)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	5,033			5,033
Exercise of common stock options (in shares)		19
Exercise of common stock options	413		413
Stock-based compensation (in shares)		30
Stock-based compensation	542		542
Repurchases of common stock (in shares)		(12)
Repurchases of common stock	(497)		(497)
Ending balance (in shares) at Oct. 01, 2022		22,001
Ending balance at Oct. 01, 2022	$ (437,471)	$ 220	458	(438,149)
Beginning balance (in shares) at Dec. 31, 2022	22,014	22,014
Beginning balance at Dec. 31, 2022	$ (438,177)	$ 220	5,182	(443,579)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	11,465			11,465
Exercise of common stock options (in shares)		17
Exercise of common stock options	389		389
Stock-based compensation (in shares)		271
Stock-based compensation	4,639	$ 3	4,636
Repurchases of common stock (in shares)		(118)
Repurchases of common stock	(3,363)	$ (1)	(3,362)
Ending balance (in shares) at Apr. 01, 2023		22,184
Ending balance at Apr. 01, 2023	$ (425,047)	$ 222	6,845	(432,114)
Beginning balance (in shares) at Dec. 31, 2022	22,014	22,014
Beginning balance at Dec. 31, 2022	$ (438,177)	$ 220	5,182	(443,579)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	$ 9,901
Ending balance (in shares) at Sep. 30, 2023	22,228	22,228
Ending balance at Sep. 30, 2023	$ (420,687)	$ 222	12,769	(433,678)
Beginning balance (in shares) at Apr. 01, 2023		22,184
Beginning balance at Apr. 01, 2023	(425,047)	$ 222	6,845	(432,114)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	754			754
Exercise of common stock options (in shares)		3
Exercise of common stock options	39		39
Stock-based compensation (in shares)		33
Stock-based compensation	5,251		5,251
Repurchases of common stock (in shares)		(6)
Repurchases of common stock	(138)		(138)
Ending balance (in shares) at Jul. 01, 2023		22,214
Ending balance at Jul. 01, 2023	(419,141)	$ 222	11,997	(431,360)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	(2,318)			(2,318)
Exercise of common stock options (in shares)		0
Exercise of common stock options	0		0
Stock-based compensation (in shares)		22
Stock-based compensation	982		982
Repurchases of common stock (in shares)		(8)
Repurchases of common stock	$ (210)		(210)
Ending balance (in shares) at Sep. 30, 2023	22,228	22,228
Ending balance at Sep. 30, 2023	$ (420,687)	$ 222	$ 12,769	$ (433,678)

Condensed Consolidated Statem_3

Condensed Consolidated Statement of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Oct. 01, 2022
Cash flows from operating activities:
Net income (loss)	$ 9,901	$ 42,040
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	55,196	49,342
Stock-based compensation	10,872	8,585
Net loss on disposals and impairments of assets	464	274
Deferred income taxes	(13,433)	(6,955)
Changes in operating assets and liabilities:
Accounts receivable	7,374	(1,029)
Inventories	(2,190)	(11,080)
Income taxes	3,571	4,530
Prepaid expenses and other assets	(5,903)	20,082
Accounts payable	5,199	28,889
Customer prepayments	(27,279)	(34,225)
Accrued compensation and benefits	(6,923)	(23,735)
Other taxes and withholding	5	4,744
Other accruals and liabilities	(5,038)	(1,340)
Net cash provided by operating activities	31,816	80,122
Cash flows from investing activities:
Purchases of property and equipment	(48,022)	(52,808)
Issuance of note receivable	(1,317)	0
Proceeds from sales of property and equipment	10	49
Net cash used in investing activities	(49,329)	(52,759)
Cash flows from financing activities:
Net increase in short-term borrowings	20,334	34,781
Repurchases of common stock	(3,711)	(64,141)
Proceeds from issuance of common stock	428	998
Debt issuance costs	(424)	(42)
Net cash provided by (used in) financing activities	16,627	(28,404)
Net decrease in cash and cash equivalents	(886)	(1,041)
Cash and cash equivalents, at beginning of period	1,792	2,389
Cash and cash equivalents, at end of period	$ 906	$ 1,348

Business and Summary of Signifi

Business and Summary of Significant Accounting Policies	9 Months Ended
	Sep. 30, 2023
Accounting Policies [Abstract]
Business and Summary of Significant Accounting Policies	Business and Summary of Significant Accounting Policies Business & Basis of Presentation The Company prepared the condensed consolidated financial statements as of and for the three and nine months ended September 30, 2023 of Sleep Number Corporation and its 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 its financial position as of September 30, 2023 and December 31, 2022, and the consolidated results of operations and cash flows for the periods presented. The 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. 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 the most recent audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 and other recent filings with the SEC. The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires the Company 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. Changes in these estimates will be reflected in the consolidated financial statements in future periods and could be material. The Company’s 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 its 100%-owned subsidiaries. All significant intra-entity balances and transactions have been eliminated in consolidation.

Fair Value Measurements

Fair Value Measurements	9 Months Ended
	Sep. 30, 2023
Fair Value Disclosures [Abstract]
Fair Value Measurements	Fair Value MeasurementsAt both September 30, 2023 and December 31, 2022, the Company had $17 million of debt and equity securities that fund the deferred compensation plan and are classified in other non-current assets. The Company also had corresponding deferred compensation plan liabilities of $17 million at both September 30, 2023 and December 31, 2022, 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 the Company 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	9 Months Ended
	Sep. 30, 2023
Inventory Disclosure [Abstract]
Inventories	Inventories Inventories consisted of the following (in thousands): September 30, December 31, Raw materials $ 8,835 $ 7,785 Work in progress 124 102 Finished goods 107,265 106,147 $ 116,224 $ 114,034

Goodwill and Intangible Assets,

Goodwill and Intangible Assets, Net	9 Months Ended
	Sep. 30, 2023
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 September 30, 2023 and December 31, 2022. Indefinite-lived trade name/trademarks totaled $1.4 million at September 30, 2023 and December 31, 2022. Definite-lived Intangible Assets September 30, 2023 December 31, 2022 Gross Carrying Accumulated Gross Carrying Accumulated Developed technologies $ 18,851 $ 18,851 $ 18,851 $ 17,641 Patents 1,972 725 1,972 559 $ 20,823 $ 19,576 $ 20,823 $ 18,200 Developed technologies - amortization expense for the three months ended September 30, 2023 and October 1, 2022, was $0.4 million and $0.5 million, respectively, and for the nine months ended September 30, 2023 and October 1, 2022 was $1.4 million and $1.6 million, respectively. Patents - amortization expense for both the three months ended September 30, 2023 and October 1, 2022, was $55 thousand, and for both the nine months ended September 30, 2023 and October 1, 2022, was $0.2 million. Annual amortization for definite-lived intangible assets for subsequent years are as follows (in thousands): 2023 (excluding the nine months ended September 30, 2023) $ 55 2024 222 2025 226 2026 222 2027 222 2028 156 Thereafter 144 Total future amortization for definite-lived intangible assets $ 1,247

Credit Agreement

Credit Agreement	9 Months Ended
	Sep. 30, 2023
Debt Disclosure [Abstract]
Credit Agreement	Credit Agreement As of September 30, 2023, the Company’s credit facility had a total commitment amount of $825 million. The credit facility is for general corporate purposes, to meet seasonal working capital requirements and to repurchase its stock. The Credit Agreement includes an accordion feature which allows the Company to increase the amount of the credit facility from $825 million to $1.2 billion, subject to lenders’ approval. The Credit Agreement provides the lenders with a collateral security interest in substantially all of the Company’s assets and those of its subsidiaries and requires the Company to comply with, among other things, a maximum net leverage ratio (5.0x) and a minimum interest coverage ratio (3.0x). The Company amended the Credit Agreement on October 26, 2022. The amendment, among other things, (a) provides relief from the requirement that the net leverage ratio not exceed 3.75x for certain corporate actions including Permitted Capital Distributions for Performance or Taxes (as defined in the Credit Agreement) and certain acquisition activity; (b) increases the permissible net leverage ratio to 5.0x for the three consecutive quarterly reporting periods ending July 1, 2023; (c) increases the commitment fee rate to 50 basis points and the margin applicable to interest rates for all borrowings by an additional 50 basis points, in each case if the net leverage ratio is greater than or equal to 4.5x; and (d) replaces the option to borrow at an interest rate based on London Interbank Offered Rate (LIBOR) to one based on a Term SOFR Rate. The Term SOFR Rate equals the sum of (x) the Term SOFR Screen Rate (as defined in the Credit Agreement) for the applicable interest period (but in no event less than zero), plus (y) 0.10%, plus (z) the margin based on Sleep Number’s net leverage ratio. The Company amended the Credit Agreement on July 24, 2023. The amendment, among other things, extends the increased permissible net leverage ratio to 5.0x to include the quarterly reporting period ending September 30, 2023. For the quarterly reporting period ending December 30, 2023, and subsequent quarterly reporting periods, the maximum leverage ratio will be 4.5x. Under the terms of the Credit Agreement, the Company pays a variable rate of interest and a commitment fee based on its leverage ratio. The Credit Agreement matures in December 2026. The Company was in compliance with all financial covenants as of September 30, 2023. The following table summarizes the Company’s borrowings under the credit facility ($ in thousands): September 30, December 31, Outstanding borrowings $ 488,000 $ 459,600 Outstanding letters of credit $ 7,147 $ 5,947 Additional borrowing capacity $ 329,853 $ 359,453 Weighted-average interest rate 8.2 % 6.7 % The Company amended the Credit Agreement on November 2, 2023. This Tenth Amendment, among other things, (a) decreases the total aggregate commitment under the Credit Agreement from $825 million to $685 million, (b) decreases the $625 million revolving loan commitment to $485 million, (c) decreases the accordion from $400 million to $342.5 million, (d) increases the Applicable Commitment Fee Rate to 50 basis points when the Net Leverage Ratio is greater than or equal to 3.50 to 1.00 (as each is defined in the Credit Agreement), (e) increases the Applicable Margin by 25 to 75 basis points for each respective range of Net Leverage Ratios (as each is defined in the Credit Agreement), (f) deems our Net Leverage Ratio as greater than or equal to 4.00 to 1.00 but less than 4.50 to 1.00 as of the Tenth Amendment effective date to set pricing for the Applicable Commitment Fee Rate and Applicable Margin until receipt of the compliance certificate for the quarterly reporting period ending December 30, 2023, (g) amends the definition of Consolidated EBITDA (as defined in the Credit Agreement) to include cash add backs, capped at $30 million for the quarterly reporting periods ending December 30, 2023, March 30, 2024, June 29, 2024, September 28, 2024, and December 28, 2024 and capped at $20 million for each quarterly reporting period ending thereafter, (h) amends the definitions of each of Net Leverage Ratio and Senior Secured Leverage Ratio (as each is defined in the Credit Agreement) to include the total operating lease liabilities of borrower, as calculated in accordance with ASC 842 accounting guidance (as of the end of the most recently completed quarterly reporting period) replacing the prior

Leases

Leases	9 Months Ended
	Sep. 30, 2023
Leases [Abstract]
Leases	Leases The Company leases its 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 the Company’s local market development approach generally results in long-term participation in given markets, the retail store leases generally provide for an initial lease term of five three The Company’s 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 the Company takes possession of the property. During lease renewal negotiations that extend beyond the original lease term, the Company estimates 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. At September 30, 2023, the Company’s finance right-of-use assets and lease liabilities were not significant. Lease costs were as follows (in thousands): Three Months Ended Nine Months Ended September 30, October 1, September 30, October 1, Operating lease costs (1) $ 28,517 $ 27,821 $ 84,889 $ 81,925 Variable lease costs $ 48 $ 54 $ 230 $ 647 ___________________________ (1) Includes short-term lease costs which are not significant. The maturities of operating lease liabilities as of September 30, 2023, were as follows (1) (in thousands): 2023 (excluding the nine months ended September, 2023) $ 27,541 2024 106,087 2025 94,907 2026 82,259 2027 66,565 2028 54,584 Thereafter 95,460 Total operating lease payments (2) 527,403 Less: Interest 87,681 Present value of operating lease liabilities $ 439,722 ___________________________ (1) Future payments for real estate taxes and certain building operating expenses for which the Company is obligated are not included in the operating lease liabilities. Total operating lease payments exclude $44 million of legally binding minimum lease payments for leases signed but not yet commenced. (2) Includes the current portion of $83 million for operating lease liabilities. Other information related to operating leases was as follows: September 30, December 31, Weighted-average remaining lease term (in years) 5.9 6.2 Weighted-average discount rate 6.4 % 6.2 % Nine Months Ended (in thousands) September 30, October 1, Cash paid for amounts included in present value of operating lease liabilities $ 80,650 $ 74,189 Right-of-use assets obtained in exchange for operating lease liabilities $ 54,172 $ 56,048

Repurchases of Common Stock

Repurchases of Common Stock	9 Months Ended
	Sep. 30, 2023
Repurchases Of Common Stock [Abstract]
Repurchases of Common Stock	Repurchases of Common Stock Repurchases of the Company’s common stock were as follows (in thousands): Three Months Ended Nine Months Ended September 30, October 1, September 30, October 1, Amount repurchased under Board-approved share repurchase program $ — $ — $ — $ 54,868 Amount repurchased in connection with the vesting of employee restricted stock grants 210 497 3,711 9,273 Total amount repurchased (based on trade dates) $ 210 $ 497 $ 3,711 $ 64,141 As of September 30, 2023, the remaining authorization under the Board-approved $600 million share repurchase program was $348 million.

Revenue Recognition

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, December 31, 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, December 31, 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, October 1, September 30, October 1, 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, October 1, 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

Stock-based Compensation Expens

Stock-based Compensation Expense	9 Months Ended
	Sep. 30, 2023
Share-Based Payment Arrangement [Abstract]
Stock-based Compensation Expense	Stock-based Compensation Expense Total stock-based compensation expense (benefit) was as follows (in thousands): Three Months Ended Nine Months Ended September 30, October 1, September 30, October 1, Stock awards (1) $ (82) $ (435) 8,031 $ 5,778 Stock options 1,064 977 2,841 2,807 Total stock-based compensation expense (1) 982 542 10,872 8,585 Income tax benefit 118 133 1,305 2,112 Total stock-based compensation expense, net of tax $ 864 $ 409 $ 9,567 $ 6,473 ___________________________ (1) Changes in stock-based compensation expense include 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	9 Months Ended
	Sep. 30, 2023
Profit Sharing And 401 (k) Plan [Abstract]
Profit Sharing and 401(k) Plan	Profit Sharing and 401(k) PlanUnder the Company’s 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, the Company makes a contribution equal to a percentage of the employee’s contribution. During both the three months ended September 30, 2023 and October 1, 2022, the Company’s contributions, net of forfeitures, were $2.3 million, and during the nine months ended September 30, 2023 and October 1, 2022, were $7.5 million and $7.6 million, respectively.

Net Income per Common Share

Net Income per Common Share	9 Months Ended
	Sep. 30, 2023
Earnings Per Share [Abstract]
Net Income per Common Share	Net Income per Common Share The components of basic and diluted net (loss) income per share were as follows (in thousands, except per share amounts): Three Months Ended Nine Months Ended September 30, October 1, September 30, October 1, Net (loss) income $ (2,318) $ 5,033 $ 9,901 $ 42,040 Reconciliation of weighted-average shares outstanding: Basic weighted-average shares outstanding 22,479 22,218 22,412 22,444 Dilutive effect of stock-based awards — 355 146 515 Diluted weighted-average shares outstanding 22,479 22,573 22,558 22,959 Net (loss) income per share – basic $ (0.10) $ 0.23 $ 0.44 $ 1.87 Net (loss) income per share – diluted $ (0.10) $ 0.22 $ 0.44 $ 1.83 For the three months ended September 30, 2023, otherwise 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. Additional potential dilutive stock-based awards totaling 1.1 million and 0.5 million for the three months ended September 30, 2023 and October 1, 2022, respectively, and 1.2 million and 0.5 million for the nine months ended September 30, 2023 and October 1, 2022, respectively, have been excluded from the diluted net (loss)/income per share calculations because these stock-based awards were anti-dilutive.

Commitments and Contingencies

Commitments and Contingencies	9 Months Ended
	Sep. 30, 2023
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): Nine Months Ended September 30, October 1, Balance at beginning of year $ 8,997 $ 10,069 Additions charged to costs and expenses for current-year sales 12,327 13,093 Deductions from reserves (12,543) (13,210) Changes in liability for pre-existing warranties during the current year, including expirations 40 (546) Balance at end of period $ 8,821 $ 9,406 Legal Proceedings The Company is involved from time to time in various legal proceedings arising in the ordinary course of its business, including primarily commercial, product liability, employment and intellectual property claims. In accordance with U.S. generally accepted accounting principles, the Company records a liability in its 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, the Company has not established an estimated range of reasonably possible material losses either because it believes that is has valid defenses to claims asserted against it, the proceeding has not advanced to a stage of discovery that would enable it to establish an estimate, or the potential loss is not material. The Company currently does not expect the outcome of pending legal proceedings to have a material effect on its 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 the Company could adversely impact its consolidated results of operations, financial position or cash flows. The Company expenses legal costs as incurred. Shareholder Class Action Complaints On December 14, 2021, purported Sleep Number shareholder, Steamfitters Local 449 Pension & Retirement Security Funds (Steamfitters), filed a putative class action complaint in the United States District Court for the District of Minnesota (the District of Minnesota) on behalf of all purchasers of Sleep Number common stock between February 18, 2021 and July 20, 2021, inclusive, against Sleep Number, Shelly Ibach and David Callen, the Company’s former Executive Vice President and Chief Financial Officer. Steamfitters alleges material misstatements and omissions in certain of Sleep Number’s public disclosures during the purported class period, in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended (the Exchange Act). The complaint seeks, among other things, unspecified monetary damages, reasonable costs and expenses and equitable/injunctive or other relief as deemed appropriate by the District of Minnesota. On February 14, 2022, a second purported Sleep Number shareholder, Ricardo Dario Schammas, moved for appointment as lead plaintiff in the action. On March 24, 2022, the District of Minnesota heard argument on Schammas’s motion, and subsequently appointed Steamfitters and Schammas as Co-Lead Plaintiffs (together, Co-Lead Plaintiffs). On July 19, 2022, Co-Lead Plaintiffs filed a consolidated amended complaint, which, like the predecessor complaint, asserts claims against Sleep Number, Shelly Ibach, and David Callen under Sections 10(b) and 20(a) of the Exchange Act. Co- Lead Plaintiffs purport to assert these claims on behalf of all purchasers of Sleep Number common stock between February 18, 2021 and July 20, 2021. Defendants moved to dismiss the consolidated amended complaint on September 19, 2022, which motion was heard by the Court on January 17, 2023. On July 10, 2023, the Court issued an order dismissing the Plaintiffs’ consolidated amended complaint with prejudice. Shareholder Derivative Complaint On May 12, 2022, Gwendolyn Calla Moore, as the appointed representative of purported Sleep Number shareholder Matthew Gelb, filed a derivative action (the Derivative Action) in the District of Minnesota against Jean-Michel Valette, Shelly Ibach, Barbara Matas, Brenda Lauderback, Daniel Alegre, Deborah Kilpatrick, Julie Howard, Kathleen Nedorostek, Michael Harrison, Stephen Gulis, Jr., David Callen, and Kevin Brown. Moore purports to assert claims on behalf of Sleep Number for breaches of fiduciary duty, waste, and contribution under Sections 10(b) and 21(d) of the Exchange Act. Moore’s allegations generally mirror those asserted in the securities complaint described above. The Moore complaint seeks damages in an unspecified amount, disgorgement, interest, and costs and expenses, including attorneys’ and experts’ fees. On September 13, 2022, the District of Minnesota entered a joint stipulation staying all proceedings in the Derivative Action pending the outcome of any motion to dismiss the Steamfitters consolidated amended complaint. Stockholder Demand On March 25, 2022, Sleep Number received a shareholder litigation demand (the “Demand”), requesting that the Board investigate the allegations in the securities class action complaint and pursue claims on Sleep Number’s behalf based on those allegations. On May 12, 2022, the Board established a special litigation committee to investigate the demand. On October 5 and October 12, 2022, Sleep Number received two additional shareholder litigation demands, which adopted and incorporated the allegations and requests in the Demand. Both of these additional litigation demands were referred to the special litigation committee. The special litigation committee has concluded that it would not be in the best interests of Sleep Number and its shareholders to take any of the actions requested in the demands at this time.

Subsequent Event

Subsequent Event	9 Months Ended
	Sep. 30, 2023
Subsequent Events [Abstract]
Subsequent Event	Subsequent EventOn November 6, 2023, in light of the demand trajectory change in August, the Company initiated business restructuring actions which are expected to reduce 2024 operating expenses by approximately $50 million and accelerate gross margin initiatives, in addition to the approximate $80 million of operating expense reductions expected to be realized in 2023. These actions are broad-based and include a headcount reduction of approximately 10% or 500 team members across all areas of the organization, including in corporate and research and development functions. These actions also include a rationalization of the store portfolio with a planned closure of 40 to 50 stores by the end of 2024, a slower rate of new store openings and remodels, and a reduction of the Company's 2024 capital expenditures. Gross margin improvement actions include value engineering and cost optimization strategies, including driving additional efficiencies through the Company's manufacturing and home delivery network. These business restructuring actions are expected to result in up to $20 million of one-time costs, with an estimated $10 million of the costs being recorded in the fourth quarter of 2023.

Pay vs Performance Disclosure

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2023	Jul. 01, 2023	Apr. 01, 2023	Oct. 01, 2022	Jul. 02, 2022	Apr. 02, 2022	Sep. 30, 2023	Oct. 01, 2022
Pay vs Performance Disclosure
Net income (loss)	$ (2,318)	$ 754	$ 11,465	$ 5,033	$ 34,933	$ 2,074	$ 9,901	$ 42,040

Insider Trading Arrangements

Insider Trading Arrangements	3 Months Ended
	Sep. 30, 2023
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

Business and Summary of Signi_2

Business and Summary of Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2023
Accounting Policies [Abstract]
Business & Basis of Presentation	Business & Basis of Presentation The Company prepared the condensed consolidated financial statements as of and for the three and nine months ended September 30, 2023 of Sleep Number Corporation and its 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 its financial position as of September 30, 2023 and December 31, 2022, and the consolidated results of operations and cash flows for the periods presented. The 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. 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 the most recent audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 and other recent filings with the SEC.
Use of Estimates	The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires the Company 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. Changes in these estimates will be reflected in the consolidated financial statements in future periods and could be material. The Company’s 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 its 100%-owned subsidiaries. All significant intra-entity balances and transactions have been eliminated in consolidation.
Leases	The Company leases its 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 the Company’s local market development approach generally results in long-term participation in given markets, the retail store leases generally provide for an initial lease term of five three The Company’s 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 the Company takes possession of the property. During lease renewal negotiations that extend beyond the original lease term, the Company estimates 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.

Inventories (Tables)

Inventories (Tables)	9 Months Ended
	Sep. 30, 2023
Inventory Disclosure [Abstract]
Schedule of Inventories	Inventories consisted of the following (in thousands): September 30, December 31, Raw materials $ 8,835 $ 7,785 Work in progress 124 102 Finished goods 107,265 106,147 $ 116,224 $ 114,034

Goodwill and Intangible Asset_2

Goodwill and Intangible Assets, Net (Tables)	9 Months Ended
	Sep. 30, 2023
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of Finite-Lived Intangible Assets	Definite-lived Intangible Assets September 30, 2023 December 31, 2022 Gross Carrying Accumulated Gross Carrying Accumulated Developed technologies $ 18,851 $ 18,851 $ 18,851 $ 17,641 Patents 1,972 725 1,972 559 $ 20,823 $ 19,576 $ 20,823 $ 18,200
Schedule of Annual Amortization of Definite-Lived Tangible Assets	Annual amortization for definite-lived intangible assets for subsequent years are as follows (in thousands): 2023 (excluding the nine months ended September 30, 2023) $ 55 2024 222 2025 226 2026 222 2027 222 2028 156 Thereafter 144 Total future amortization for definite-lived intangible assets $ 1,247

Credit Agreement (Tables)

Credit Agreement (Tables)	9 Months Ended
	Sep. 30, 2023
Debt Disclosure [Abstract]
Schedule of Borrowings Under Credit Facility	The following table summarizes the Company’s borrowings under the credit facility ($ in thousands): September 30, December 31, Outstanding borrowings $ 488,000 $ 459,600 Outstanding letters of credit $ 7,147 $ 5,947 Additional borrowing capacity $ 329,853 $ 359,453 Weighted-average interest rate 8.2 % 6.7 %

Leases (Tables)

Leases (Tables)	9 Months Ended
	Sep. 30, 2023
Leases [Abstract]
Schedule of Operating Lease Costs	Lease costs were as follows (in thousands): Three Months Ended Nine Months Ended September 30, October 1, September 30, October 1, Operating lease costs (1) $ 28,517 $ 27,821 $ 84,889 $ 81,925 Variable lease costs $ 48 $ 54 $ 230 $ 647 ___________________________ (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 September 30, 2023, were as follows (1) (in thousands): 2023 (excluding the nine months ended September, 2023) $ 27,541 2024 106,087 2025 94,907 2026 82,259 2027 66,565 2028 54,584 Thereafter 95,460 Total operating lease payments (2) 527,403 Less: Interest 87,681 Present value of operating lease liabilities $ 439,722 ___________________________ (1) Future payments for real estate taxes and certain building operating expenses for which the Company is obligated are not included in the operating lease liabilities. Total operating lease payments exclude $44 million of legally binding minimum lease payments for leases signed but not yet commenced. (2) Includes the current portion of $83 million for operating lease liabilities.
Schedule of Other Information Related Operating Leases	Other information related to operating leases was as follows: September 30, December 31, Weighted-average remaining lease term (in years) 5.9 6.2 Weighted-average discount rate 6.4 % 6.2 % Nine Months Ended (in thousands) September 30, October 1, Cash paid for amounts included in present value of operating lease liabilities $ 80,650 $ 74,189 Right-of-use assets obtained in exchange for operating lease liabilities $ 54,172 $ 56,048

Repurchases of Common Stock (Ta

Repurchases of Common Stock (Tables)	9 Months Ended
	Sep. 30, 2023
Repurchases Of Common Stock [Abstract]
Schedule of Repurchases of Common Stock	Repurchases of the Company’s common stock were as follows (in thousands): Three Months Ended Nine Months Ended September 30, October 1, September 30, October 1, Amount repurchased under Board-approved share repurchase program $ — $ — $ — $ 54,868 Amount repurchased in connection with the vesting of employee restricted stock grants 210 497 3,711 9,273 Total amount repurchased (based on trade dates) $ 210 $ 497 $ 3,711 $ 64,141

Revenue Recognition (Tables)

Revenue Recognition (Tables)	9 Months Ended
	Sep. 30, 2023
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 the condensed consolidated balance sheets as follows (in thousands): September 30, December 31, 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, December 31, Deferred contract liabilities included in: Other current liabilities $ 36,141 $ 36,335 Other non-current liabilities 70,727 70,999 $ 106,868 $ 107,334
Disaggregation of Revenue	Net sales were as follows (in thousands): Three Months Ended Nine Months Ended September 30, October 1, September 30, October 1, 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
Schedule of Sales Return Liability	The activity in the sales returns liability account was as follows (in thousands): Nine Months Ended September 30, October 1, 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

Stock-based Compensation Expe_2

Stock-based Compensation Expense (Tables)	9 Months Ended
	Sep. 30, 2023
Share-Based Payment Arrangement [Abstract]
Schedule of Stock-Based Compensation Expense	Total stock-based compensation expense (benefit) was as follows (in thousands): Three Months Ended Nine Months Ended September 30, October 1, September 30, October 1, Stock awards (1) $ (82) $ (435) 8,031 $ 5,778 Stock options 1,064 977 2,841 2,807 Total stock-based compensation expense (1) 982 542 10,872 8,585 Income tax benefit 118 133 1,305 2,112 Total stock-based compensation expense, net of tax $ 864 $ 409 $ 9,567 $ 6,473 ___________________________ (1) Changes in stock-based compensation expense include the cumulative impact of the change in the expected achievements of certain performance targets.

Net Income per Common Share (Ta

Net Income per Common Share (Tables)	9 Months Ended
	Sep. 30, 2023
Earnings Per Share [Abstract]
Components of Basic and Diluted Net (Loss) Income per Share	The components of basic and diluted net (loss) income per share were as follows (in thousands, except per share amounts): Three Months Ended Nine Months Ended September 30, October 1, September 30, October 1, Net (loss) income $ (2,318) $ 5,033 $ 9,901 $ 42,040 Reconciliation of weighted-average shares outstanding: Basic weighted-average shares outstanding 22,479 22,218 22,412 22,444 Dilutive effect of stock-based awards — 355 146 515 Diluted weighted-average shares outstanding 22,479 22,573 22,558 22,959 Net (loss) income per share – basic $ (0.10) $ 0.23 $ 0.44 $ 1.87 Net (loss) income per share – diluted $ (0.10) $ 0.22 $ 0.44 $ 1.83

Commitments and Contingencies (

Commitments and Contingencies (Tables)	9 Months Ended
	Sep. 30, 2023
Commitments and Contingencies Disclosure [Abstract]
Warranty Liabilities	The activity in the accrued warranty liabilities account was as follows (in thousands): Nine Months Ended September 30, October 1, Balance at beginning of year $ 8,997 $ 10,069 Additions charged to costs and expenses for current-year sales 12,327 13,093 Deductions from reserves (12,543) (13,210) Changes in liability for pre-existing warranties during the current year, including expirations 40 (546) Balance at end of period $ 8,821 $ 9,406

Fair Value Measurements (Detail

Fair Value Measurements (Details) - Level 1 - USD ($) $ in Millions	Sep. 30, 2023	Dec. 31, 2022
Other non-current assets | Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities assets funding the deferred compensation plan	$ 17	$ 17
Other non-current liabilities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Deferred compensation plan liability	$ 17	$ 17

Inventories (Details)

Inventories (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Inventory Disclosure [Abstract]
Raw materials	$ 8,835	$ 7,785
Work in progress	124	102
Finished goods	107,265	106,147
Inventories	$ 116,224	$ 114,034

Goodwill and Intangible Asset_3

Goodwill and Intangible Assets, Net - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Oct. 01, 2022	Sep. 30, 2023	Oct. 01, 2022	Dec. 31, 2022
Goodwill And Intangible Assets [Line Items]
Goodwill	$ 64,000		$ 64,000		$ 64,000
Gross Carrying Amount	20,823		20,823		20,823
Accumulated Amortization	19,576		19,576		18,200
Developed technologies
Goodwill And Intangible Assets [Line Items]
Amortization expense	400	$ 500	1,400	$ 1,600
Gross Carrying Amount	18,851		18,851		18,851
Accumulated Amortization	18,851		18,851		17,641
Patents
Goodwill And Intangible Assets [Line Items]
Amortization expense	55	$ 55	200	$ 200
Gross Carrying Amount	1,972		1,972		1,972
Accumulated Amortization	725		725		559
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 - Definite-lived Intangible Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Definite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 20,823	$ 20,823
Accumulated Amortization	19,576	18,200
Developed technologies
Definite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	18,851	18,851
Accumulated Amortization	18,851	17,641
Patents
Definite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	1,972	1,972
Accumulated Amortization	$ 725	$ 559

Goodwill and Intangible Asset_5

Goodwill and Intangible Assets, Net - Annual Amortization for Definite-Lived Intangible (Details) $ in Thousands	Sep. 30, 2023 USD ($)
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
2023 (excluding the nine months ended September 30, 2023)	$ 55
2024	222
2025	226
2026	222
2027	222
2028	156
Thereafter	144
Total future amortization for definite-lived intangible assets	$ 1,247

Credit Agreement - Narrative (D

Credit Agreement - Narrative (Details) - Line of Credit $ in Millions	Nov. 02, 2023 USD ($)	Oct. 26, 2022	Sep. 30, 2023 USD ($)	Jul. 24, 2023	Oct. 25, 2022
Line of Credit Facility [Line Items]
Current borrowing capacity			$ 825
Total commitment amount			$ 1,200
Minimum interest coverage ratio			3
Net leverage ratio, maximum threshold		4.5	5		3.75
Net leverage ratio, maximum threshold for three consecutive quarterly reporting periods		5
Accordion feature, limit			$ 400
Commitment fee rate		0.50%
Variable rate		0.50%
Requisite net leverage ratio			3.75
Subsequent Event
Line of Credit Facility [Line Items]
Current borrowing capacity	$ 685
Net leverage ratio, maximum threshold	4.50
Accordion feature, limit	$ 342.5
Commitment fee rate	0.50%
Net leverage ratio, minimum threshold for commitment fee rate increase	3.50
Increase (decrease) in variable rate	0.25%
Variable rate	0.75%
Net leverage ratio, minimum threshold	4
Requisite net leverage ratio	3
Amendment fee percentage	0.20%
Subsequent Event | Debt Covenant Period One
Line of Credit Facility [Line Items]
Net leverage ratio, maximum threshold	5
Interest coverage ratio, maximum threshold	1.50
Subsequent Event | Debt Covenant Period Two
Line of Credit Facility [Line Items]
Net leverage ratio, maximum threshold	5.50
Interest coverage ratio, maximum threshold	1.25
Subsequent Event | Debt Covenant Period Three
Line of Credit Facility [Line Items]
Net leverage ratio, maximum threshold	5
Interest coverage ratio, maximum threshold	1.50
Subsequent Event | Debt Covenant Period Four
Line of Credit Facility [Line Items]
Net leverage ratio, maximum threshold	4.80
Interest coverage ratio, maximum threshold	3
Subsequent Event | Debt Covenant Period Five
Line of Credit Facility [Line Items]
Net leverage ratio, maximum threshold	4
Subsequent Event | Debt Instrument, Agreement, Period One
Line of Credit Facility [Line Items]
Maximum cash add back	$ 30
Subsequent Event | Debt Instrument, Redemption, Period Two
Line of Credit Facility [Line Items]
Maximum cash add back	20
Secured Overnight Financing Rate (SOFR)
Line of Credit Facility [Line Items]
Variable rate		0.10%
Revolving Credit Facility
Line of Credit Facility [Line Items]
Current borrowing capacity			$ 625
Net leverage ratio, maximum threshold				5
Net leverage ratio, for the period ended December 30, 2023 and subsequent periods				4.5
Revolving Credit Facility | Subsequent Event
Line of Credit Facility [Line Items]
Current borrowing capacity	$ 485

Credit Agreement - Schedule of

Credit Agreement - Schedule of Borrowings Under Credit Facility (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Debt Disclosure [Abstract]
Outstanding borrowings	$ 488,000	$ 459,600
Outstanding letters of credit	7,147	5,947
Additional borrowing capacity	$ 329,853	$ 359,453
Weighted-average interest rate	8.20%	6.70%

Leases - Additional Information

Leases - Additional Information (Details)	Sep. 30, 2023
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	6 years

Leases - Schedule of Operating

Leases - Schedule of Operating Lease Costs (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Oct. 01, 2022	Sep. 30, 2023	Oct. 01, 2022
Leases [Abstract]
Operating lease costs	$ 28,517	$ 27,821	$ 84,889	$ 81,925
Variable lease costs	$ 48	$ 54	$ 230	$ 647

Leases - Schedule of Maturities

Leases - Schedule of Maturities of Operating Lease Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Leases [Abstract]
2023 (excluding the nine months ended September, 2023)	$ 27,541
2024	106,087
2025	94,907
2026	82,259
2027	66,565
2028	54,584
Thereafter	95,460
Total operating lease payments	527,403
Less: Interest	87,681
Present value of operating lease liabilities	439,722
Amount leases executed, not yet commenced, excluded from table.	44,000
Operating lease liabilities, current	$ 83,143	$ 79,533

Leases - Schedule of Other Info

Leases - Schedule of Other Information Related Operating Leases (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Oct. 01, 2022	Dec. 31, 2022
Leases [Abstract]
Weighted-average remaining lease term (in years)	5 years 10 months 24 days		6 years 2 months 12 days
Weighted-average discount rate	6.40%		6.20%
Cash paid for amounts included in present value of operating lease liabilities	$ 80,650	$ 74,189
Right-of-use assets obtained in exchange for operating lease liabilities	$ 54,172	$ 56,048

Repurchases of Common Stock - S

Repurchases of Common Stock - Schedule of Repurchase of Common Stock (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Oct. 01, 2022	Sep. 30, 2023	Oct. 01, 2022
Repurchases Of Common Stock [Abstract]
Amount repurchased under Board-approved share repurchase program	$ 0	$ 0	$ 0	$ 54,868
Amount repurchased in connection with the vesting of employee restricted stock grants	210	497	3,711	9,273
Total amount repurchased (based on trade dates)	$ 210	$ 497	$ 3,711	$ 64,141

Repurchases of Common Stock - A

Repurchases of Common Stock - Additional Information (Details) $ in Millions	Sep. 30, 2023 USD ($)
Repurchases Of Common Stock [Abstract]
Authorized share repurchase program	$ 600
Remaining authorized stock purchase plan	$ 348

Revenue Recognition - Schedule

Revenue Recognition - Schedule of Deferred Contract Assets and Deferred Contract Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Deferred contract assets included in:
Deferred contract assets	$ 83,946	$ 83,685
Deferred contract liabilities included in:
Deferred contract liabilities	106,868	107,334
Other current assets
Deferred contract assets included in:
Other current assets	28,219	28,121
Other non-current assets
Deferred contract assets included in:
Other non-current assets	55,727	55,564
Other current liabilities
Deferred contract liabilities included in:
Other current liabilities	36,141	36,335
Other non-current liabilities
Deferred contract liabilities included in:
Other non-current liabilities	$ 70,727	$ 70,999

Revenue Recognition - Additiona

Revenue Recognition - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Oct. 01, 2022	Sep. 30, 2023	Oct. 01, 2022
Disaggregation of Revenue [Line Items]
Revenue recognized, included in beginning deferred contract liability balance	$ 10	$ 9	$ 28	$ 26
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%	98%	98%	99%
SleepIQ Technology | Minimum
Disaggregation of Revenue [Line Items]
Estimated product life			4 years 6 months
SleepIQ Technology | Maximum
Disaggregation of Revenue [Line Items]
Estimated product life			5 years

Revenue Recognition - Disaggreg

Revenue Recognition - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Oct. 01, 2022	Sep. 30, 2023	Oct. 01, 2022
Disaggregation of Revenue [Line Items]
Total Company	$ 472,648	$ 540,566	$ 1,457,964	$ 1,616,769
Retail stores
Disaggregation of Revenue [Line Items]
Total Company	409,268	466,632	1,270,076	1,401,789
Online, phone, chat and other
Disaggregation of Revenue [Line Items]
Total Company	$ 63,380	$ 73,934	$ 187,888	$ 214,980

Revenue Recognition - Schedul_2

Revenue Recognition - Schedule of Sales Return Liability (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Oct. 01, 2022
Sales Return Liability [Roll Forward]
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

Stock-based Compensation Expe_3

Stock-based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Oct. 01, 2022	Sep. 30, 2023	Oct. 01, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	$ 982	$ 542	$ 10,872	$ 8,585
Income tax benefit	118	133	1,305	2,112
Total stock-based compensation expense, net of tax	864	409	9,567	6,473
Stock awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	(82)	(435)	8,031	5,778
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	$ 1,064	$ 977	$ 2,841	$ 2,807

Profit Sharing and 401(k) Plan

Profit Sharing and 401(k) Plan (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Oct. 01, 2022	Sep. 30, 2023	Oct. 01, 2022
Profit Sharing And 401 (k) Plan [Abstract]
Employee compensation deferral (as a percent)			50%
Employer contributions	$ 2.3	$ 2.3	$ 7.5	$ 7.6

Net Income per Common Share - C

Net Income per Common Share - Components of Basic and Diluted Net Income Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2023	Jul. 01, 2023	Apr. 01, 2023	Oct. 01, 2022	Jul. 02, 2022	Apr. 02, 2022	Sep. 30, 2023	Oct. 01, 2022
Earnings Per Share [Abstract]
Net (loss) income	$ (2,318)	$ 754	$ 11,465	$ 5,033	$ 34,933	$ 2,074	$ 9,901	$ 42,040
Reconciliation of weighted-average shares outstanding:
Basic weighted-average shares outstanding (in shares)	22,479,000			22,218,000			22,412,000	22,444,000
Dilutive effect of stock-based awards (in shares)	0			355,000			146,000	515,000
Diluted weighted-average shares outstanding (in shares)	22,479,000			22,573,000			22,558,000	22,959,000
Net (loss) income per share – basic (in dollars per share)	$ (0.10)			$ 0.23			$ 0.44	$ 1.87
Net (loss) income per share – diluted (in dollars per share)	$ (0.10)			$ 0.22			$ 0.44	$ 1.83

Net Income per Common Share - N

Net Income per Common Share - Narrative (Details) - shares shares in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Oct. 01, 2022	Sep. 30, 2023	Oct. 01, 2022
Earnings Per Share [Abstract]
Antidilutive securities excluded from computation of earnings per share (in shares)	1.1	0.5	1.2	0.5

Commitments and Contingencies_2

Commitments and Contingencies (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Oct. 01, 2022
Warranty Liabilities [Roll Forward]
Balance at beginning of year	$ 8,997	$ 10,069
Additions charged to costs and expenses for current-year sales	12,327	13,093
Deductions from reserves	(12,543)	(13,210)
Changes in liability for pre-existing warranties during the current year, including expirations	40	(546)
Balance at end of period	$ 8,821	$ 9,406

Commitments and Contingencies -

Commitments and Contingencies - Narrative (Details)	Oct. 12, 2022 litigationDemand
Pending Litigation
Loss Contingencies [Line Items]
Number of litigation demands	2

Subsequent Event (Details)

Subsequent Event (Details) $ in Millions		12 Months Ended
	Nov. 06, 2023 USD ($) team_member store	Dec. 28, 2024 USD ($)	Dec. 30, 2023 USD ($)
Reduced Employee Expenses | Forecast
Subsequent Event [Line Items]
Reduction of operating expenses		$ 50
Subsequent Event
Subsequent Event [Line Items]
Percent of positions eliminated	10%
Number of positions eliminated | team_member	500
Expected restructuring costs	$ 20
Subsequent Event | Forecast
Subsequent Event [Line Items]
Expected restructuring costs			$ 10
Subsequent Event | Minimum
Subsequent Event [Line Items]
Number of stores eliminated | store	40
Subsequent Event | Maximum
Subsequent Event [Line Items]
Number of stores eliminated | store	50
Subsequent Event | Reduced Employee Expenses
Subsequent Event [Line Items]
Reduction of operating expenses	$ 80