Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 28, 2019 | Jan. 25, 2020 | Jun. 29, 2019 | |
Cover [Abstract] | |||
Entity Registrant Name | SLEEP NUMBER CORPORATION | ||
Trading Symbol | SNBR | ||
Entity Central Index Key | 0000827187 | ||
Current Fiscal Year End Date | --12-28 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 28, 2019 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Shell Company | false | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Common Stock, Shares Outstanding | 27,749,000 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 681,720,000 | ||
Entity Interactive Data Current | Yes | ||
Title of 12(b) Security | Common Stock, par value $0.01 per share | ||
Entity Incorporation, State or Country Code | MN | ||
Security Exchange Name | NASDAQ | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity File Number | 000-25121 | ||
Entity Tax Identification Number | 41-1597886 | ||
Entity Address, Address Line One | 1001 Third Avenue South | ||
Entity Address, City or Town | Minneapolis | ||
Entity Address, State or Province | MN | ||
Entity Address, Postal Zip Code | 55404 | ||
City Area Code | 763 | ||
Local Phone Number | 551-7000 | ||
Documents Incorporated by Reference | DOCUMENTS INCORPORATED BY REFERENCE Portions of the registrant’s proxy statement to be furnished to shareholders in connection with its 2020 Annual Meeting of Shareholders are incorporated by reference in Part III, Items 10-14 of this Annual Report on Form 10-K. |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 28, 2019 | Dec. 29, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 1,593 | $ 1,612 |
Accounts receivable, net of allowance for doubtful accounts of $898 and $699, respectively | 19,978 | 24,795 |
Inventories | 87,065 | 84,882 |
Prepaid expenses | 15,335 | 8,009 |
Other current assets | 36,397 | 31,559 |
Total current assets | 160,368 | 150,857 |
Non-current assets: | ||
Property and equipment, net | 197,421 | 205,631 |
Operating lease right-of-use assets | 327,017 | 0 |
Goodwill and intangible assets, net | 73,226 | 75,407 |
Other non-current assets | 48,011 | 38,243 |
Total assets | 806,043 | 470,138 |
Current liabilities: | ||
Borrowings under revolving credit facility | 231,000 | 199,600 |
Accounts payable | 134,594 | 144,781 |
Customer prepayments | 34,248 | 27,066 |
Accrued sales returns | 19,809 | 19,907 |
Compensation and benefits | 40,321 | 27,700 |
Taxes and withholding | 22,171 | 18,380 |
Operating lease liabilities | 59,561 | 0 |
Other current liabilities | 53,070 | 51,234 |
Total current liabilities | 594,774 | 488,668 |
Non-current liabilities: | ||
Deferred income taxes | 3,808 | 4,822 |
Operating lease liabilities | 298,090 | 0 |
Other non-current liabilities | 68,802 | 86,198 |
Total liabilities | 965,474 | 579,688 |
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, 27,961 and 30,868 shares issued and outstanding, respectively | 280 | 309 |
Additional paid-in capital | 0 | 0 |
Accumulated deficit | (159,711) | (109,859) |
Total shareholders’ deficit | (159,431) | (109,550) |
Total liabilities and shareholders’ deficit | $ 806,043 | $ 470,138 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 28, 2019 | Dec. 29, 2018 |
Current assets: | ||
Allowance for doubtful accounts | $ 898 | $ 699 |
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) | 27,961,000 | 30,868,000 |
Common stock, shares outstanding (in shares) | 27,961,000 | 30,868,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 28, 2019 | Dec. 29, 2018 | Dec. 30, 2017 | |
Income Statement [Abstract] | |||
Net sales | $ 1,698,352 | $ 1,531,575 | $ 1,444,497 |
Cost of sales | 646,429 | 603,614 | 547,150 |
Gross profit | 1,051,923 | 927,961 | 897,347 |
Operating expenses: | |||
Sales and marketing | 766,922 | 687,380 | 650,357 |
General and administrative | 137,956 | 119,378 | 127,269 |
Research and development | 34,950 | 28,775 | 27,806 |
Total operating expenses | 939,828 | 835,533 | 805,432 |
Operating income | 112,095 | 92,428 | 91,915 |
Interest expense, net | 11,587 | 5,907 | 877 |
Income before income taxes | 100,508 | 86,521 | 91,038 |
Income tax expense | 18,663 | 16,982 | 25,961 |
Net income | $ 81,845 | $ 69,539 | $ 65,077 |
Basic net income per share: | |||
Net income per share – basic | $ 2.78 | $ 1.97 | $ 1.58 |
Weighted-average shares – basic | 29,472,000 | 35,256,000 | 41,212,000 |
Diluted net income per share: | |||
Net income per share – diluted | $ 2.70 | $ 1.92 | $ 1.55 |
Weighted-average shares – diluted | 30,355,000 | 36,165,000 | 42,085,000 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' (Deficit) Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Retained Earnings (Accumulated Deficit) |
Balance at Dec. 31, 2016 | $ 160,320 | $ 436 | $ 0 | $ 159,884 |
Balance (in shares) at Dec. 31, 2016 | 43,569,000 | |||
Net income | 65,077 | $ 0 | 0 | 65,077 |
Exercise of common stock options | 3,241 | $ 2 | 3,239 | 0 |
Exercise of common stock options (in shares) | 222,000 | |||
Stock-based compensation | 15,763 | $ 6 | 15,757 | 0 |
Stock-based compensation (in shares) | 594,000 | |||
Repurchases of common stock | (155,245) | $ (56) | (18,996) | (136,193) |
Repurchases of common stock (in shares) | (5,572,000) | |||
Balance at Dec. 30, 2017 | 89,156 | $ 388 | 0 | 88,768 |
Balance (in shares) at Dec. 30, 2017 | 38,813,000 | |||
Net income | 69,539 | $ 0 | 0 | 69,539 |
Exercise of common stock options | 2,788 | $ 2 | 2,786 | 0 |
Exercise of common stock options (in shares) | 186,000 | |||
Stock-based compensation | 11,412 | $ 3 | 11,409 | 0 |
Stock-based compensation (in shares) | 271,000 | |||
Repurchases of common stock | (282,445) | $ (84) | (14,195) | (268,166) |
Repurchases of common stock (in shares) | (8,402,000) | |||
Balance at Dec. 29, 2018 | $ (109,550) | $ 309 | 0 | (109,859) |
Balance (in shares) at Dec. 29, 2018 | 30,868,000 | 30,868,000 | ||
Net income | $ 81,845 | $ 0 | 0 | 81,845 |
Exercise of common stock options | 7,190 | $ 4 | 7,186 | 0 |
Exercise of common stock options (in shares) | 381,000 | |||
Stock-based compensation | 16,657 | $ 5 | 16,652 | 0 |
Stock-based compensation (in shares) | 480,000 | |||
Repurchases of common stock | (155,573) | $ (38) | (23,838) | (131,697) |
Repurchases of common stock (in shares) | (3,768,000) | |||
Balance at Dec. 28, 2019 | $ (159,431) | $ 280 | $ 0 | $ (159,711) |
Balance (in shares) at Dec. 28, 2019 | 27,961,000 | 27,961,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 28, 2019 | Dec. 29, 2018 | Dec. 30, 2017 | |
Cash flows from operating activities: | |||
Net income | $ 81,845 | $ 69,539 | $ 65,077 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 61,866 | 61,966 | 61,291 |
Stock-based compensation | 16,657 | 11,412 | 15,763 |
Net (gain) loss on disposals and impairments of assets | (430) | (51) | 249 |
Deferred income taxes | (1,014) | 7,447 | 2,042 |
Changes in operating assets and liabilities: | |||
Accounts receivable | 4,817 | (5,483) | 393 |
Inventories | (2,183) | (584) | (9,272) |
Income taxes | 3,066 | (6,561) | 1,697 |
Prepaid expenses and other assets | (13,959) | 5,551 | (12,405) |
Accounts payable | 10,661 | (9,894) | 21,779 |
Customer prepayments | 7,182 | (701) | 1,560 |
Accrued compensation and benefits | 12,920 | (6,872) | 15,398 |
Other taxes and withholding | 725 | 707 | (893) |
Other accruals and liabilities | 7,007 | 5,064 | 9,928 |
Net cash provided by operating activities | 189,160 | 131,540 | 172,607 |
Cash flows from investing activities: | |||
Purchases of property and equipment | (59,239) | (45,515) | (59,829) |
Proceeds from sales of property and equipment | 2,615 | 272 | 36 |
Net cash used in investing activities | (56,624) | (45,243) | (59,793) |
Cash flows from financing activities: | |||
Repurchases of common stock | (165,079) | (272,446) | (155,245) |
Net increase in short-term borrowings | 26,357 | 182,336 | 28,094 |
Proceeds from issuance of common stock | 7,190 | 2,788 | 3,241 |
Debt issuance costs | (1,023) | (1,014) | (12) |
Net cash used in financing activities | (132,555) | (88,336) | (123,922) |
Net decrease in cash, cash equivalents and restricted cash | (19) | (2,039) | (11,108) |
Cash and cash equivalents, at beginning of period | 1,612 | 3,651 | 14,759 |
Cash and cash equivalents, at end of period | 1,593 | 1,612 | 3,651 |
Non-cash financing transactions: | |||
Change in unsettled repurchases of common stock | (9,506) | 9,999 | 0 |
Supplemental Disclosure of Cash Flow Information | |||
Income taxes paid, net of refunds | 17,182 | 15,031 | 22,807 |
Interest paid | 10,656 | 5,086 | 753 |
Finance lease obligations incurred | 0 | 943 | 0 |
Purchases of property and equipment included in accounts payable | $ 5,725 | $ 12,123 | $ 3,964 |
Business and Summary of Signifi
Business and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 28, 2019 | |
Accounting Policies [Abstract] | |
Business and Summary of Significant Accounting Policies | (1) Business and Summary of Significant Accounting Policies Business & Basis of Presentation Sleep Number Corporation and our 100%-owned subsidiaries (Sleep Number or the Company) have a vertically integrated business model and are the exclusive designer, manufacturer, marketer, retailer and servicer of Sleep Number ® ® We generate revenue by marketing our innovations to new and existing customers, and by selling products through two distribution channels. Our Company-Controlled channel, which includes retail, online and phone, sells directly to consumers. Our Wholesale/Other channel sells to and through selected retail and wholesale customers in the United States. The consolidated financial statements include the accounts of Sleep Number Corporation and our subsidiaries. All significant intra-entity balances and transactions have been eliminated in consolidation. Fiscal Year Our fiscal year ends on the Saturday closest to December 31. Fiscal years and their respective fiscal year ends were as follows: fiscal 2019 ended December 28, 2019; fiscal 2018 ended December 29, 2018; and fiscal 2017 ended December 30, 2017. Fiscal years 2019, 2018 and 2017 each had 52 weeks Use of Estimates in the Preparation of Financial Statements The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles (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 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 financial statements in future periods. Our critical accounting policies consist of stock-based compensation, warranty liabilities and revenue recognition. Cash and Cash Equivalents Cash and cash equivalents include highly-liquid investments with original maturities of three months or less. The carrying value of these investments approximates fair value due to their short-term maturity. Our banking arrangements allow us to fund outstanding checks when presented to the financial institution for payment, resulting in book overdrafts. Book overdrafts are included in accounts payable in our consolidated balance sheets and in net increase in short-term borrowings in the financing activities section of our consolidated statements of cash flows. Book overdrafts totaled $33 million and $38 million at December 28, 2019 and December 29, 2018, respectively. Accounts Receivable Accounts receivable are recorded net of an allowance for expected losses and consist primarily of receivables from third-party financiers for customer credit card purchases and receivables from wholesale customers. The allowance is recognized in an amount equal to anticipated future write-offs. We estimate future write-offs based on delinquencies, aging trends, industry risk trends, our historical experience and current trends. Account balances are charged off against the allowance when we believe it is probable the receivable will not be recovered. Inventories Inventories include materials, labor and overhead and are stated at the lower of cost or net realizable value. Cost is determined by the first-in, first-out method. We review inventory quantities on hand and record reserves for obsolescence based on historical selling prices, current market conditions and forecasted product demand, to reduce inventory to net realizable value. Property and Equipment Property and equipment, carried at cost, is depreciated using the straight-line method over the estimated useful lives of the assets. The cost and related accumulated depreciation of assets sold or retired is removed from the accounts with any resulting gain or loss included in net income in our consolidated statements of operations. Maintenance and repairs are charged to expense as incurred. Major renewals and betterments that extend useful life are capitalized. Leasehold improvements are depreciated over the shorter of the estimated useful lives of the assets or the contractual term of the lease, with consideration of lease renewal options if renewal appears probable. Estimated useful lives of our property and equipment by major asset category are as follows: Leasehold improvements 5 to 15 years Furniture and equipment 3 to 15 years Production machinery 3 to 7 years Computer equipment and software 3 to 12 years Goodwill and Intangible Assets, Net Goodwill is the difference between the purchase price of a company and the fair market value of the acquired company's net identifiable assets. Our intangible assets include developed technologies and trade names/trademarks. Definite-lived intangible assets are being amortized using the straight-line method over their estimated lives, ranging from 8-10 years. Asset Impairment Charges Long-lived Assets and Definite-lived Intangible Assets Goodwill and Indefinite-lived Intangible Assets Warranty Liabilities We provide a limited warranty on most of the products we sell. The estimated warranty costs, which are expensed at the time of sale and included in cost of sales, are based on historical trends and warranty claim rates incurred by us and are adjusted for any current trends as appropriate. The majority of our warranty claims are incurred within the first year. Our warranty liability contains uncertainties because our warranty obligations cover an extended period of time and require management to make estimates for claim rates and the projected cost of materials and freight associated with sending replacement parts to customers. We regularly assess and adjust the estimate of accrued warranty claims by updating claims rates for actual trends and projected claim costs. We classify as non-current those estimated warranty costs expected to be paid out in greater than one year. The activity in the accrued warranty liabilities account was as follows (in thousands): 2019 2018 2017 Balance at beginning of period $ 10,389 $ 9,320 $ 8,633 Additions charged to costs and expenses for current-year sales 10,949 12,385 12,214 Deductions from reserves (11,007 ) (11,743 ) (10,752 ) Change in liabilities for pre-existing warranties during the current year, including expirations 1,014 427 (775 ) Balance at end of period $ 11,345 $ 10,389 $ 9,320 Fair Value Measurements Fair value measurements are reported in one of three levels based on the lowest level of significant input used: • Level 1 – observable inputs such as quoted prices in active markets; • Level 2 – inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and • Level 3 – unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. We generally estimate fair value of long-lived assets, including our retail stores, using the income approach, which we base on estimated future cash flows (discounted and with interest charges). The inputs used to determine fair value relate primarily to future assumptions regarding sales volumes, gross profit rates, retail store operating expenses and applicable probability weightings regarding future alternative uses. These inputs are categorized as Level 3 inputs under the fair value measurements guidance. The inputs used represent management’s assumptions about what information market participants would use in pricing the assets and are based upon the best information available at the balance sheet date. Shareholders’ Deficit Dividends We are not restricted from paying cash dividends under our Credit Agreement so long as we are not in default under the Credit agreement , Share Repurchases At December 28, 2019, we had a $475 million remaining authorization under our $500 million board approved share repurchase program. There is no expiration date governing the period over which we can repurchase shares. Any repurchased shares are constructively retired and returned to an unissued status. The cost of stock repurchases is first charged to additional paid-in-capital. Once additional paid-in capital is reduced to zero, any additional amounts are charged to accumulated deficit. Revenue Recognition We recognize revenue when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. Revenue recognized excludes sales taxes. Amounts billed to customers for delivery and setup are included in net sales. For most products, we receive payment before or promptly after, the products or services are delivered to the customer. We accept sales returns of most products during a 100-night trial period. Accrued sales returns represent a refund liability for the amount of consideration that we do not expect to be entitled to because it will be refunded to customers. The refund liability estimate is based on historical return rates and is adjusted for any current trends as appropriate. Each reporting period we remeasure the liability to reflect changes in the estimate, with a corresponding adjustment to net sales. Our beds sold with SleepIQ ® See Note 9, Revenue Recognition Cost of Sales, Sales and Marketing, General and Administrative (G&A) and Research & Development (R&D) Expenses The following tables summarize the primary costs classified in each major expense category (the classification of which may vary within our industry): Cost of Sales Sales & Marketing • Costs associated with purchasing, manufacturing, shipping, handling and delivering our products to our retail stores and customers; • Physical inventory losses, scrap and obsolescence; • Related occupancy and depreciation expenses; • Costs associated with returns and exchanges; and • Estimated costs to service customer warranty claims. • Advertising, marketing and media production; • Marketing and selling materials such as brochures, videos, websites, customer mailings and in-store signage; • Payroll and benefits for sales and customer service staff; • Store occupancy costs; • Store depreciation expense; • Credit card processing fees; and • Promotional financing costs. G&A R&D (1) • Payroll and benefit costs for corporate employees, including information technology, legal, human resources, finance, sales and marketing administration, investor relations and risk management; • Occupancy costs of corporate facilities; • Depreciation related to corporate assets; • Information hardware, software and maintenance; • Insurance; • Investor relations costs; and • Other overhead costs. • Internal labor and benefits related to research and development activities; • Outside consulting services related to research and development activities; and • Testing equipment related to research and development activities. __________ (1) Leases Effective December 30, 2018 (beginning of fiscal 2019), we adopted ASC Topic 842, Leases We determine if an arrangement is a lease at inception. Right-of-use (ROU) assets and operating lease liabilities are recognized at the lease commencement date based on the estimated present value of future lease payments over the lease term. We elected the option to not separate lease and non-lease components for all of our leases. ost of our leases do not provide an implicit interest rate nor is the rate available to us from our lessors. As an alternative, Leases with an initial term of 12 months or less are not recorded on the balance sheet as an ROU asset or operating lease liability. We recognize operating lease costs for these short-term leases, primarily small equipment leases, on a straight-line basis over the lease term. At December 28, 2019, our finance ROU assets and associated lease liabilities were not significant. See New Accounting Pronouncements, Recently Adopted Accounting Guidance Pre-Opening Costs Costs associated with the start-up and promotion of new retail store openings are expensed as incurred. Advertising Costs We incur advertising costs associated with print, digital and broadcast advertisements. Advertising costs are charged to expense when the ad first runs. Advertising expense was $242 million, $210 million and $194 million in 2019, 2018 and 2017, respectively. Advertising costs deferred and included in prepaid expenses in our consolidated balance sheet were $2 million as of December 29, 2018. Deferred advertising costs as of December 28, 2019 were not significant. Insurance We are self-insured for certain losses related to health and workers’ compensation claims, although we obtain third-party insurance coverage to limit exposure to these claims. We estimate our self-insured liabilities using a number of factors including historical claims experience and analysis of incurred but not reported claims. Our self-insurance liability was $9 million and $8 million at December 28, 2019 and December 29, 2018, respectively. At December 28, 2019, and December 29, 2018, $6 million and $5 million, respectively, were included in current liabilities: compensation and benefits in our consolidated balance sheets and $3 million and $3 million, respectively, were included in other non-current liabilities in our consolidated balance sheets. Software Capitalization For software developed or obtained for internal use, we capitalize direct external costs associated with developing or obtaining internal-use software. In addition, we capitalize certain payroll and payroll-related costs for employees who are directly involved with the development of such applications. Capitalized costs related to internal-use software under development are treated as construction-in-progress until the program, feature or functionality is ready for its intended use, at which time depreciation commences. We expense any data conversion or training costs as incurred. Capitalized software costs are included in property and equipment, net in our consolidated balance sheet. We capitalize costs incurred with the implementation of a cloud computing arrangement that is a service contract, consistent with our policy for software developed or obtained for internal use. The capitalized implementation costs of cloud computing arrangements are expensed over the term of the cloud computing arrangement in the same line item in the statement of operations as the associated hosting fees. Capitalized costs incurred with the implementation of a cloud computing arrangement are included in prepaid expenses and other non-current assets in our consolidated balance sheet, and in operating cash flows in our consolidated statement of cash flows. Stock-Based Compensation We compensate officers, directors and key employees with stock-based compensation under stock plans approved by our shareholders and administered under the supervision of our Board of Directors (Board). At December 28, 2019, a total of 2.1 million shares were available for future grant. These plans include non-qualified stock options and stock awards. We record stock-based compensation expense based on the award’s fair value at the grant date and the awards that are expected to vest. We recognize stock-based compensation expense over the period during which an employee is required to provide services in exchange for the award. We reduce compensation expense by estimated forfeitures. Forfeitures are estimated using historical experience and projected employee turnover. We include, as part of cash flows from operating activities, the benefit of tax deductions in excess of recognized stock-based compensation expense. In addition, excess tax benefits or deficiencies are recorded as discrete adjustments to income tax expense. Stock Options We determine the fair value of stock options granted and the resulting compensation expense at the date-of-grant using the Black-Scholes-Merton option-pricing model. Descriptions of significant assumptions used to estimate the expected volatility, risk-free interest rate and expected term are as follows: Expected Volatility – expected volatility was determined based on implied volatility of our traded options and historical volatility of our stock price. Risk-Free Interest Rate – the risk-free interest rate was based on the implied yield available on U.S. Treasury zero-coupon issues at the date of grant with a term equal to the expected term. Expected Term – expected term represents the period that our stock-based awards are expected to be outstanding and was determined based on historical experience and anticipated future exercise patterns, giving consideration to the contractual terms of unexercised stock-based awards. Stock Awards Stock Options. Certain time-based stock awards have a performance condition (performance-based). The final number of shares earned for performance-based stock awards and the related compensation expense is adjusted up or down to the extent the performance target is met. The actual number of shares that will ultimately be awarded range from 0% 200% See Note 8, Shareholders’ Deficit Income Taxes We recognize deferred tax assets and liabilities for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established for any portion of deferred tax assets that are not considered more likely than not to be realized. We evaluate all available positive and negative evidence, including our forecast of future taxable income, to assess the need for a valuation allowance on our deferred tax assets. We record a liability for unrecognized tax benefits from uncertain tax positions taken, or expected to be taken, in our tax returns. We follow a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the available evidence indicates it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount which is more than 50% likely of being realized upon ultimate settlement. We consider many factors when evaluating and estimating our tax positions and tax benefits, which may require periodic adjustments, and may not accurately forecast actual outcomes. We classify net interest and penalties related to income taxes as a component of income tax expense in our consolidated statements of operations. Net Income Per Share We calculate basic net income per share by dividing net income by the weighted-average number of common shares outstanding during the period. We calculate diluted net income per share based on the weighted-average number of common shares outstanding adjusted by the number of potentially dilutive common shares as determined by the treasury stock method. Potentially dilutive shares consist of stock options and stock awards. Sources of Supply We currently obtain materials and components used to produce our beds from outside sources. As a result, we are dependent upon suppliers that in some instances, are our sole source of supply, or supply the vast majority of the particular component or material. We continuously evaluate opportunities to dual-source key components and materials. The failure of one or more of our suppliers to provide us with materials or components on a timely basis could significantly impact our consolidated results of operations and net income per share. While we believe that these materials and components, or suitable replacements, could be obtained from other sources in the event of a disruption or loss of supply, we may not be able to find alternative sources of supply or alternative sources of supply on comparable terms and an unexpected loss of supply over a short period of time may not allow us to replace these sources in the ordinary course of business. New Accounting Pronouncements Recently Adopted Accounting Guidance Effective December 30, 2018 (beginning of fiscal 2019), we adopted ASC Topic 842, Leases The new guidance establishes a right-of-use (ROU) model that requires us to recognize an ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. We have elected the following practical expedients and accounting policies related to the adoption of the new lease standard: • We did not reassess our prior conclusions about lease identification, lease classification and initial direct costs; • We did not elect the use of hindsight; • We adopted an accounting policy for short-term leases allowing us to not recognize ROU assets and lease liabilities for leases with a term of 12 months or less; and • We elected the option to not separate lease and non-lease components for all of our leases. In accordance with the new guidance on December 30, 2018, we recorded $299 million of net operating lease ROU assets and $327 million of operating lease liabilities ($52 million recorded in current operating lease liabilities and $275 million in non-current operating lease liabilities). Deferred rent and lease incentive liabilities associated with historical operating leases totaling $28 million were reclassified to the operating lease ROU assets as required by ASC Topic 842. The adoption of the new guidance had no impact on accumulated deficit, net income or net cash provided by operating activities. At December 30, 2018, our finance ROU assets and lease liabilities were not significant. See Note 1, Business and Summary of Significant Accounting Policies , Leases and N ote 7 , Leases , for further information. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 28, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | (2) Fair Value Measurements At December 28, 2019 and December 29, 2018, we had $8 million and $6 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 $8 million and $6 million at December 28, 2019 and December 29, 2018, 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 | 12 Months Ended |
Dec. 28, 2019 | |
Inventory Disclosure [Abstract] | |
Inventories | (3) Inventories Inventories consisted of the following (in thousands): December 28, 2019 December 29, 2018 Raw materials $ 6,231 $ 4,549 Work in progress 31 3 Finished goods 80,803 80,330 $ 87,065 $ 84,882 Finished goods inventories consisted of the following (in thousands): December 28, 2019 December 29, 2018 Finished beds, including retail display beds and deliveries in-transit to those customers who have utilized home delivery services $ 24,509 $ 25,313 Finished components that were ready for assembly for the completion of beds 40,139 38,665 Retail accessories 16,155 16,352 $ 80,803 $ 80,330 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 28, 2019 | |
Property And Equipment [Abstract] | |
Property and Equipment | (4) Property and Equipment Property and equipment consisted of the following (in thousands): December 28, 2019 December 29, 2018 Land $ — $ 1,999 Leasehold improvements 115,566 109,722 Furniture and equipment 123,161 108,841 Production machinery, computer equipment and software 245,175 238,659 Construction in progress 6,590 10,385 Less: Accumulated depreciation and amortization (293,071 ) (263,975 ) $ 197,421 $ 205,631 |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, Net | 12 Months Ended |
Dec. 28, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, Net | ( 5 ) Goodwill and Intangible Assets, Net Goodwill and Indefinite-Lived Intangible Assets Goodwill was $64 million at December 28, 2019 and December 29, 2018. Indefinite-lived trade name/trademarks totaled $1.4 million at December 28, 2019 and December 29, 2018. Definite-Lived Intangible Assets The gross carrying amount of our developed technologies was $19 million at December 28, 2019 and December 29, 2018. Accumulated amortization was $11 million and $9 million at December 28, 2019 and December 29, 2018, respectively. Amortization expense in 2019, 2018 and 2017 for definite-lived intangible assets was $2 million, $2 million and $3 million, respectively. Annual amortization for definite-lived intangible assets for subsequent years are as follows (in thousands): 2020 $ 2,213 2021 2,181 2022 2,181 2023 1,209 2024 — Thereafter — Total future amortization for definite-lived intangible assets $ 7,784 |
Credit Agreement
Credit Agreement | 12 Months Ended |
Dec. 28, 2019 | |
Debt Disclosure [Abstract] | |
Credit Agreement | (6) Credit Agreement Our $450 million revolving credit facility (Credit Agreement) 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). Under the terms of the Credit Agreement we pay a variable rate of interest and a commitment fee based on our leverage ratio. The Credit Agreement includes an accordion feature which allows us to increase the amount of the credit facility from $450 million to $600 million, subject to lenders’ approval. The Credit Agreement matures in February 2024 The following tables summarizes our borrowings under the credit facility ($ in thousands): December 28, 2019 December 29, 2018 Outstanding borrowings $ 231,000 $ 199,600 Outstanding letters of credit $ 3,497 $ 3,497 Additional borrowing capacity $ 215,503 $ 96,903 Weighted-average interest rate 3.5 % 4.2 % |
Leases
Leases | 12 Months Ended |
Dec. 28, 2019 | |
Leases [Abstract] | |
Leases | ( 7 ) 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 to 10 years. Our office and manufacturing leases provide for an initial lease term of up to 15 years. In addition, our mall-based retail store leases may require payment of variable rent based on net sales in excess of certain thresholds. Certain leases may contain options to extend the term of the original lease. The exercise of lease renewal options is at our sole discretion. Lease options are included in the lease term only if exercise is reasonably certain at lease commencement. Our lease agreements do not contain any material residual value guarantees. We also lease vehicles and certain equipment under operating leases with an initial lease term of three to five years. 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. We adopted ASC Topic 842, Leases Leases Recently Adopted Accounting Guidance 2019 Lease disclosures under ASC 842 are as follows: Lease costs were as follows (in thousands): 2019 Operating lease costs (1) $ 86,026 Variable lease costs $ 1,809 (1) Includes short-term lease costs which are not significant. The maturities of operating lease liabilities as of December 28, 2019, were as follows (in thousands): 2020 $ 83,232 2021 76,199 2022 67,953 2023 58,038 2024 46,113 Thereafter 120,727 Total operating lease payments (1) 452,262 Less: Interest 94,611 Present value of operating lease liabilities (2) $ 357,651 (1) Total operating lease payments exclude $43 million of legally binding minimum lease payments for leases signed but not yet commenced. (2) Includes the current portion of $60 million for operating lease liabilities. Other information related to operating leases was as follows: December 28, 2019 Weighted-average remaining lease term (years) 6.6 Weighted-average discount rate 7.2 % (in thousands) December 28, 2019 Cash paid for amounts included in present value of operating lease liabilities $ 81,718 Right-of-use assets obtained in exchange for operating lease liabilities (1) $ 75,384 (1) See Note 1, Recently Adopted Accounting Guidance 2018 and 2017 Lease disclosures under ASC 840 are as follows: Rent expense was as follows (in thousands): Facility Rents: 2018 2017 Minimum rents $ 71,851 $ 66,239 Contingent rents 1,847 2,845 Total $ 73,698 $ 69,084 Equipment Rents $ 5,692 $ 4,935 The aggregate minimum rental commitments under operating leases as of December 29, 2018, were expected to be as follows (in thousands): 2019 $ 78,337 2020 73,331 2021 66,491 2022 59,515 2023 51,076 Thereafter 149,318 Total future minimum lease payments $ 478,068 We also had $0.9 million in capital lease commitments at December 29, 2018. |
Shareholders_ Deficit
Shareholders’ Deficit | 12 Months Ended |
Dec. 28, 2019 | |
Shareholders Equity [Abstract] | |
Shareholders’ Deficit | (8) Shareholders’ Deficit Stock-Based Compensation Expense Total stock-based compensation expense was as follows (in thousands): 2019 2018 2017 Stock awards $ 14,265 $ 8,930 $ 13,419 Stock options 2,392 2,482 2,344 Total stock-based compensation expense (1) 16,657 11,412 15,763 Income tax benefit 3,998 2,750 5,249 Total stock-based compensation expense, net of tax $ 12,659 $ 8,662 $ 10,514 (1) Stock Options A summary of our stock option activity was as follows (in thousands, except per share amounts and years): Stock Options Weighted- Average Exercise Price per Share Weighted- Average Remaining Contractual Term (years) Aggregate Intrinsic Value (1) Balance at December 29, 2018 1,322 $ 22.64 5.9 $ 13,009 Granted 141 45.27 Exercised (381 ) 18.88 Canceled/Forfeited (14 ) 30.13 Outstanding at December 28, 2019 1,068 $ 26.87 6.0 $ 24,274 Exercisable at December 28, 2019 772 $ 22.88 5.1 $ 20,612 Vested and expected to vest at December 28, 2019 1,046 $ 26.70 6.0 $ 23,940 (1) Aggregate intrinsic value includes only those options where the current share price is equal to or greater than the share price on the date of grant. Other information pertaining to options was as follows (in thousands, except per share amounts): 2019 2018 2017 Weighted-average grant date fair value of stock options granted $ 18.97 $ 13.96 $ 10.33 Total intrinsic value (at exercise) of stock options exercised $ 9,636 $ 3,459 $ 3,586 Cash received from the exercise of stock options for the fiscal year ended December 28, 2019 was $7.2 million. Our tax benefit related to the exercise of stock options for the fiscal year ended December 28, 2019 was $2.4 million. At December 28, 2019, there was $2.9 million of total stock option compensation expense related to non-vested stock options not yet recognized, which is expected to be recognized over a weighted-average period of 1.8 years. The assumptions used to calculate the fair value of options granted using the Black-Scholes-Merton option-pricing model were as follows: Valuation Assumptions 2019 2018 2017 Expected dividend yield 0 % 0 % 0 % Expected volatility 43 % 43 % 46 % Risk-free interest rate 2.2 % 2.7 % 2.0 % Expected term (in years) 5.4 5.0 5.1 Stock Awards Stock award activity was as follows (in thousands, except per share amounts): Time- Based Stock Awards Weighted-Average Grant Date Fair Value Performance- and Market-Based Stock Awards Weighted-Average Grant Date Fair Value Outstanding at December 29, 2018 383 $ 28.66 1,061 $ 23.91 Granted 172 44.60 168 46.70 Vested (192 ) 25.91 (304 ) 19.50 Canceled/Forfeited (33 ) 35.26 (333 ) 22.75 Outstanding at December 28, 2019 330 $ 38.09 592 $ 33.30 At December 28, 2019, there was $7.8 million of unrecognized compensation expense related to non-vested time-based stock awards, which is expected to be recognized over a weighted-average period of 1.9 years, and $12.3 million of unrecognized compensation expense related to non-vested performance-based and market-based stock awards, which is expected to be recognized over a weighted-average period of 1.9 years. During 2018, 5,027 performance-based stock awards with a market condition were granted and had a weighted-average grant date fair value of $35.97 per award. These stock awards are reflected in the "Performance- and Market-Based Stock Awards" column in the stock award activity table above. During 2017, 270,895 performance-based stock awards with a market condition were granted and had a weighted-average grant date fair value of $22.40 per award. There were no performance-based stock awards with a market condition issued in 2019. The assumptions used to calculate the fair value of the 2018 and 2017 performance-based stock awards with a market condition, using the Monte Carlo simulation model, were as follows: Valuation Assumptions 2019 2018 2017 Expected dividend yield NA 0 % 0 % Expected volatility NA 43 % 46 % Risk-free interest rate NA 2.6 % 1.5 % Repurchases of Common Stock Repurchases of our common stock were as follows (in thousands): 2019 2018 2017 Amount repurchased under Board-approved share repurchase program $ 145,900 $ 279,101 $ 150,000 Amount repurchased in connection with the vesting of employee restricted stock grants 9,673 3,344 5,245 Total amount repurchased (based on trade dates) $ 155,573 $ 282,445 $ 155,245 As of December 28, 2019, the remaining authorization under our Board-approved share repurchase program was $475 million. Net Income per Common Share The components of basic and diluted net income per share were as follows (in thousands, except per share amounts): 2019 2018 2017 Net income $ 81,845 $ 69,539 $ 65,077 Reconciliation of weighted-average shares outstanding: Basic weighted-average shares outstanding 29,472 35,256 41,212 Dilutive effect of stock-based awards 883 909 873 Diluted weighted-average shares outstanding 30,355 36,165 42,085 Net income per share – basic $ 2.78 $ 1.97 $ 1.58 Net income per share – diluted $ 2.70 $ 1.92 $ 1.55 Additional potential dilutive stock options totaling 0.2 million, 0.2 million and 0.4 million for 2019, 2018 and 2017, respectively, have been excluded from our diluted net income per share calculations because these securities’ exercise prices were anti-dilutive (e.g., greater than the average market price of our common stock). |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Dec. 28, 2019 | |
Revenue Recognition [Abstract] | |
Revenue Recognition | ( 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 |
Profit Sharing and 401(k) Plan
Profit Sharing and 401(k) Plan | 12 Months Ended |
Dec. 28, 2019 | |
Profit Sharing And401 K Plan [Abstract] | |
Profit Sharing and 401(k) Plan | (10) Profit Sharing and 401(k) Plan Under 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 year, we may make a discretionary contribution equal to a percentage of the employee’s contribution. During 2019, 2018 and 2017, our contributions, net of forfeitures, were $6 million, $5 million and $5 million, respectively. |
Interest Expense, Net
Interest Expense, Net | 12 Months Ended |
Dec. 28, 2019 | |
Interest Expense [Abstract] | |
Interest Expense, Net | (11) Interest Expense, Net Interest expense, net, consisted of the following (in thousands): 2019 2018 2017 Interest expense $ 11,591 $ 5,911 $ 975 Interest income (4 ) (4 ) (98 ) Interest expense, net $ 11,587 $ 5,907 $ 877 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 28, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | (12) Income Taxes Income tax expense consisted of the following (in thousands): 2019 2018 2017 Current: Federal $ 12,299 $ 12,483 $ 19,153 State 3,293 2,871 4,046 15,592 15,354 23,199 Deferred: Federal 2,591 708 2,734 State 480 920 28 3,071 1,628 2,762 Income tax expense $ 18,663 $ 16,982 $ 25,961 The following table provides a reconciliation between the statutory federal income tax rate and our effective income tax rate: 2019 2018 2017 Statutory federal income tax 21.0 % 21.0 % 35.0 % State income taxes, net of federal benefit 3.6 3.3 2.5 Stock-based compensation (4.3 ) (1.1 ) (1.5 ) R&D tax credits (2.2 ) (2.0 ) (1.1 ) Changes in unrecognized tax benefits (0.5 ) 1.2 (0.6 ) Manufacturing deduction — — (3.5 ) Tax Cuts and Jobs Act effects — (3.9 ) (1.9 ) Other 1.0 1.1 (0.4 ) Effective income tax rate 18.6 % 19.6 % 28.5 % We file income tax returns with the U.S. federal government and various state jurisdictions. In the normal course of business, we are subject to examination by federal and state taxing authorities. We are no longer subject to federal income tax examinations for years prior to 2016 or state income tax examinations prior to 2015. On December 22, 2017, the Tax Cuts and Jobs Act (TCJA) was enacted. The TCJA reduced the statutory federal tax rate from 35% to 21% starting in 2018. In addition, there were various other tax law changes that impacted us. In connection with the reduction of the federal tax rate, we recognized a provisional tax benefit of $1.7 million for the year ended December 30, 2017. This provisional tax benefit was related to the re-measurement of U.S. deferred tax assets and liabilities using a federal tax rate of 21%, which, under the TCJA, is expected to be in place when such deferred assets and liabilities reverse in future periods. During 2018, we updated our provisional tax benefit based on new information, including a tax planning analysis, and recorded an additional $2.9 million tax benefit. Deferred Income Taxes The tax effects of temporary differences that give rise to deferred income taxes were as follows (in thousands): 2019 2018 Deferred tax assets: Stock-based compensation $ 8,342 $ 7,633 Operating lease liabilities (1) 90,059 — Deferred rent and lease incentives (1) — 6,994 Warranty and returns liabilities 7,215 6,857 Net operating loss carryforwards and credits 1,987 2,324 Compensation and benefits 4,698 3,699 Other 3,953 3,406 Total gross deferred tax assets 116,254 30,913 Valuation allowance (615 ) (615 ) Total gross deferred tax assets after valuation allowance 115,639 30,298 Deferred tax liabilities: Property and equipment 30,274 29,912 Operating lease right-of-use assets (1) 82,340 — Deferred revenue 3,859 1,749 Other 2,974 3,459 Total gross deferred tax liabilities 119,447 35,120 Net deferred tax liabilities $ (3,808 ) $ (4,822 ) (1) Business and summary of Significant Accounting Policies New Accounting Pronouncements Recently Adopted Accounting Guidance Leases At December 28, 2019, we had net operating loss carryforwards for federal purposes of $1 million, which will expire between 2025 and 2027, and for state income tax purposes of $1 million, which will expire between 2028 and 2034. We evaluate our deferred income taxes quarterly to determine if valuation allowances are required. As part of this evaluation, we assess whether valuation allowances should be established for any deferred tax assets that are not considered more likely than not to be realized, using all available evidence, both positive and negative. This assessment considers, among other matters, the nature, frequency, and severity of historical losses, forecasts of future profitability, taxable income in available carryback periods and tax planning strategies. In making such judgments, significant weight is given to evidence that can be objectively verified. We have provided a $0.6 million valuation allowance resulting primarily from our inability to utilize certain foreign net operating losses, and federal net operating losses associated with our 2015 acquisition of BAM Labs, Inc. Unrecognized Tax Benefits Reconciliations of the beginning and ending amounts of unrecognized tax benefits were as follows (in thousands): Federal and State Tax 2019 2018 2017 Beginning balance $ 3,866 $ 2,839 $ 3,460 Increases related to current-year tax positions 638 778 330 Increases related to prior-year tax positions 134 595 87 Decreases related to prior-year tax positions (363 ) — (1,038 ) Lapse of statute of limitations (663 ) (333 ) — Settlements with taxing authorities (275 ) (13 ) — Ending balance $ 3,337 $ 3,866 $ 2,839 As of December 28, 2019 and December 29, 2018, we had $3 million and $4 million, respectively, of unrecognized tax benefits, which if recognized, would affect our effective tax rate. The amount of unrecognized tax benefits is not expected to change materially within the next 12 months. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 28, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | (13) Commitments and Contingencies 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 September 18, 2018, two former Home Delivery team members filed suit, now venued in Superior Court in Fresno County, California, alleging representative claims on a purported class action basis under the California Labor Code Private Attorney General Act. While the two representative plaintiffs were in the Home Delivery workforce, the Complaint does not limit the purported plaintiff class to that group. The plaintiffs allege that Sleep Number failed or refused to adopt adequate practices, policies and procedures relating to wage payments, record keeping, employment disclosures, meal and rest breaks, among other claims, under California law. The Complaint sought damages in the form of civil penalties and plaintiffs’ attorneys’ fees. The parties have executed a settlement agreement pending Court approval, which includes the settlement and release of certain additional related claims that are contained in a consolidated complaint currently pending in San Diego County Superior Court. We intend to continue vigorously defending this matter in the event the Court does not approve the settlement. On March 27, 2018, Level Sleep, LLC 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 ® Consumer Credit Arrangements We refer customers seeking extended financing to certain third-party financiers (Card Servicers). The Card Servicers, if credit is granted, establish the interest rates, fees, and all other terms and conditions of the customer’s account based on their evaluation of the creditworthiness of the customer. As the accounts are owned by the Card Servicers, at no time are the accounts purchased or acquired from us. We are not liable to the Card Servicers for our customers’ credit defaults. Commitments As of December 28, 2019, we had $22 million of inventory purchase commitments. As part of the normal course of business, there are a limited number of inventory supply contracts that contain penalty provisions for failure to purchase contracted quantities. We do not currently expect any payments under these provisions. At December 28, 2019, we had entered into 31 lease commitments primarily for future retail store locations. These lease commitments provide for total lease payments over the next three to 10 years, which if consummated based on current cost estimates, would approximate $43 million over the initial lease term. The future lease payments for these lease commitments have been excluded in the total operating lease payments in Note 7, Leases |
Summary of Quarterly Financial
Summary of Quarterly Financial Data (unaudited) | 12 Months Ended |
Dec. 28, 2019 | |
Summary Of Quarterly Financial Data Unaudited [Abstract] | |
Summary of Quarterly Financial Data (unaudited) | (14) Summary of Quarterly Financial Data (unaudited) The following is a condensed summary of our quarterly results (in thousands, except net income per share amounts). Quarterly diluted net income per share amounts may not total to the respective annual amount due to changes in weighted-average shares outstanding during the year. Quarter 1st 2nd 3rd 4th 2019 Net sales $ 426,445 $ 355,963 $ 474,778 $ 441,166 $ 1,698,352 Gross profit 262,233 217,186 296,390 276,114 1,051,923 Operating income 32,707 7,245 39,152 32,991 112,095 Net income 25,418 4,280 28,054 24,093 81,845 Net income per share – diluted $ 0.80 $ 0.14 $ 0.94 $ 0.82 $ 2.70 Quarter 1st 2nd 3rd 4th 2018 Net sales $ 388,633 $ 316,338 $ 414,779 $ 411,825 $ 1,531,575 Gross profit 237,477 188,888 250,517 251,079 927,961 Operating income 26,901 2,086 25,321 38,120 92,428 Net income 20,548 3,744 18,257 26,990 69,539 Net income per share – diluted $ 0.52 $ 0.10 $ 0.52 $ 0.81 $ 1.92 |
Schedule II - Valuation and Qua
Schedule II - Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 28, 2019 | |
Valuation And Qualifying Accounts [Abstract] | |
Schedule II - Valuation and Qualifying Accounts | Description 2019 2018 2017 Allowance for doubtful accounts Balance at beginning of period $ 699 $ 714 $ 884 Additions charged to costs and expenses 1,391 815 915 Deductions from reserves (1,192 ) (830 ) (1,085 ) Balance at end of period $ 898 $ 699 $ 714 |
Business and Summary of Signi_2
Business and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 28, 2019 | |
Accounting Policies [Abstract] | |
Business and Basis of Presentation | Business & Basis of Presentation Sleep Number Corporation and our 100%-owned subsidiaries (Sleep Number or the Company) have a vertically integrated business model and are the exclusive designer, manufacturer, marketer, retailer and servicer of Sleep Number ® ® We generate revenue by marketing our innovations to new and existing customers, and by selling products through two distribution channels. Our Company-Controlled channel, which includes retail, online and phone, sells directly to consumers. Our Wholesale/Other channel sells to and through selected retail and wholesale customers in the United States. The consolidated financial statements include the accounts of Sleep Number Corporation and our subsidiaries. All significant intra-entity balances and transactions have been eliminated in consolidation. |
Fiscal Year | Fiscal Year Our fiscal year ends on the Saturday closest to December 31. Fiscal years and their respective fiscal year ends were as follows: fiscal 2019 ended December 28, 2019; fiscal 2018 ended December 29, 2018; and fiscal 2017 ended December 30, 2017. Fiscal years 2019, 2018 and 2017 each had 52 weeks |
Use of Estimates in the Preparation of Financial Statements | Use of Estimates in the Preparation of Financial Statements The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles (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 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 financial statements in future periods. Our critical accounting policies consist of stock-based compensation, warranty liabilities and revenue recognition. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include highly-liquid investments with original maturities of three months or less. The carrying value of these investments approximates fair value due to their short-term maturity. Our banking arrangements allow us to fund outstanding checks when presented to the financial institution for payment, resulting in book overdrafts. Book overdrafts are included in accounts payable in our consolidated balance sheets and in net increase in short-term borrowings in the financing activities section of our consolidated statements of cash flows. Book overdrafts totaled $33 million and $38 million at December 28, 2019 and December 29, 2018, respectively. |
Accounts Receivable | Accounts Receivable Accounts receivable are recorded net of an allowance for expected losses and consist primarily of receivables from third-party financiers for customer credit card purchases and receivables from wholesale customers. The allowance is recognized in an amount equal to anticipated future write-offs. We estimate future write-offs based on delinquencies, aging trends, industry risk trends, our historical experience and current trends. Account balances are charged off against the allowance when we believe it is probable the receivable will not be recovered. |
Inventories | Inventories Inventories include materials, labor and overhead and are stated at the lower of cost or net realizable value. Cost is determined by the first-in, first-out method. We review inventory quantities on hand and record reserves for obsolescence based on historical selling prices, current market conditions and forecasted product demand, to reduce inventory to net realizable value. |
Property and Equipment | Property and Equipment Property and equipment, carried at cost, is depreciated using the straight-line method over the estimated useful lives of the assets. The cost and related accumulated depreciation of assets sold or retired is removed from the accounts with any resulting gain or loss included in net income in our consolidated statements of operations. Maintenance and repairs are charged to expense as incurred. Major renewals and betterments that extend useful life are capitalized. Leasehold improvements are depreciated over the shorter of the estimated useful lives of the assets or the contractual term of the lease, with consideration of lease renewal options if renewal appears probable. Estimated useful lives of our property and equipment by major asset category are as follows: Leasehold improvements 5 to 15 years Furniture and equipment 3 to 15 years Production machinery 3 to 7 years Computer equipment and software 3 to 12 years |
Goodwill and Intangible Assets, Net | Goodwill and Intangible Assets, Net Goodwill is the difference between the purchase price of a company and the fair market value of the acquired company's net identifiable assets. Our intangible assets include developed technologies and trade names/trademarks. Definite-lived intangible assets are being amortized using the straight-line method over their estimated lives, ranging from 8-10 years. |
Asset Impairment Charges | Asset Impairment Charges Long-lived Assets and Definite-lived Intangible Assets Goodwill and Indefinite-lived Intangible Assets |
Warranty Liabilities | Warranty Liabilities We provide a limited warranty on most of the products we sell. The estimated warranty costs, which are expensed at the time of sale and included in cost of sales, are based on historical trends and warranty claim rates incurred by us and are adjusted for any current trends as appropriate. The majority of our warranty claims are incurred within the first year. Our warranty liability contains uncertainties because our warranty obligations cover an extended period of time and require management to make estimates for claim rates and the projected cost of materials and freight associated with sending replacement parts to customers. We regularly assess and adjust the estimate of accrued warranty claims by updating claims rates for actual trends and projected claim costs. We classify as non-current those estimated warranty costs expected to be paid out in greater than one year. The activity in the accrued warranty liabilities account was as follows (in thousands): 2019 2018 2017 Balance at beginning of period $ 10,389 $ 9,320 $ 8,633 Additions charged to costs and expenses for current-year sales 10,949 12,385 12,214 Deductions from reserves (11,007 ) (11,743 ) (10,752 ) Change in liabilities for pre-existing warranties during the current year, including expirations 1,014 427 (775 ) Balance at end of period $ 11,345 $ 10,389 $ 9,320 |
Fair Value Measurements | Fair Value Measurements Fair value measurements are reported in one of three levels based on the lowest level of significant input used: • Level 1 – observable inputs such as quoted prices in active markets; • Level 2 – inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and • Level 3 – unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. We generally estimate fair value of long-lived assets, including our retail stores, using the income approach, which we base on estimated future cash flows (discounted and with interest charges). The inputs used to determine fair value relate primarily to future assumptions regarding sales volumes, gross profit rates, retail store operating expenses and applicable probability weightings regarding future alternative uses. These inputs are categorized as Level 3 inputs under the fair value measurements guidance. The inputs used represent management’s assumptions about what information market participants would use in pricing the assets and are based upon the best information available at the balance sheet date. |
Shareholders’ Deficit | Shareholders’ Deficit Dividends We are not restricted from paying cash dividends under our Credit Agreement so long as we are not in default under the Credit agreement , Share Repurchases At December 28, 2019, we had a $475 million remaining authorization under our $500 million board approved share repurchase program. There is no expiration date governing the period over which we can repurchase shares. Any repurchased shares are constructively retired and returned to an unissued status. The cost of stock repurchases is first charged to additional paid-in-capital. Once additional paid-in capital is reduced to zero, any additional amounts are charged to accumulated deficit. |
Revenue Recognition | Revenue Recognition We recognize revenue when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. Revenue recognized excludes sales taxes. Amounts billed to customers for delivery and setup are included in net sales. For most products, we receive payment before or promptly after, the products or services are delivered to the customer. We accept sales returns of most products during a 100-night trial period. Accrued sales returns represent a refund liability for the amount of consideration that we do not expect to be entitled to because it will be refunded to customers. The refund liability estimate is based on historical return rates and is adjusted for any current trends as appropriate. Each reporting period we remeasure the liability to reflect changes in the estimate, with a corresponding adjustment to net sales. Our beds sold with SleepIQ ® |
Expenses | The following tables summarize the primary costs classified in each major expense category (the classification of which may vary within our industry): Cost of Sales Sales & Marketing • Costs associated with purchasing, manufacturing, shipping, handling and delivering our products to our retail stores and customers; • Physical inventory losses, scrap and obsolescence; • Related occupancy and depreciation expenses; • Costs associated with returns and exchanges; and • Estimated costs to service customer warranty claims. • Advertising, marketing and media production; • Marketing and selling materials such as brochures, videos, websites, customer mailings and in-store signage; • Payroll and benefits for sales and customer service staff; • Store occupancy costs; • Store depreciation expense; • Credit card processing fees; and • Promotional financing costs. G&A R&D (1) • Payroll and benefit costs for corporate employees, including information technology, legal, human resources, finance, sales and marketing administration, investor relations and risk management; • Occupancy costs of corporate facilities; • Depreciation related to corporate assets; • Information hardware, software and maintenance; • Insurance; • Investor relations costs; and • Other overhead costs. • Internal labor and benefits related to research and development activities; • Outside consulting services related to research and development activities; and • Testing equipment related to research and development activities. __________ (1) |
Leases | Leases Effective December 30, 2018 (beginning of fiscal 2019), we adopted ASC Topic 842, Leases We determine if an arrangement is a lease at inception. Right-of-use (ROU) assets and operating lease liabilities are recognized at the lease commencement date based on the estimated present value of future lease payments over the lease term. We elected the option to not separate lease and non-lease components for all of our leases. ost of our leases do not provide an implicit interest rate nor is the rate available to us from our lessors. As an alternative, Leases with an initial term of 12 months or less are not recorded on the balance sheet as an ROU asset or operating lease liability. We recognize operating lease costs for these short-term leases, primarily small equipment leases, on a straight-line basis over the lease term. At December 28, 2019, our finance ROU assets and associated lease liabilities were not significant. See New Accounting Pronouncements, Recently Adopted Accounting Guidance |
Pre-Opening Costs | Pre-Opening Costs Costs associated with the start-up and promotion of new retail store openings are expensed as incurred. |
Advertising Costs | Advertising Costs We incur advertising costs associated with print, digital and broadcast advertisements. Advertising costs are charged to expense when the ad first runs. Advertising expense was $242 million, $210 million and $194 million in 2019, 2018 and 2017, respectively. Advertising costs deferred and included in prepaid expenses in our consolidated balance sheet were $2 million as of December 29, 2018. Deferred advertising costs as of December 28, 2019 were not significant. |
Insurance | Insurance We are self-insured for certain losses related to health and workers’ compensation claims, although we obtain third-party insurance coverage to limit exposure to these claims. We estimate our self-insured liabilities using a number of factors including historical claims experience and analysis of incurred but not reported claims. Our self-insurance liability was $9 million and $8 million at December 28, 2019 and December 29, 2018, respectively. At December 28, 2019, and December 29, 2018, $6 million and $5 million, respectively, were included in current liabilities: compensation and benefits in our consolidated balance sheets and $3 million and $3 million, respectively, were included in other non-current liabilities in our consolidated balance sheets. |
Software Capitalization | Software Capitalization For software developed or obtained for internal use, we capitalize direct external costs associated with developing or obtaining internal-use software. In addition, we capitalize certain payroll and payroll-related costs for employees who are directly involved with the development of such applications. Capitalized costs related to internal-use software under development are treated as construction-in-progress until the program, feature or functionality is ready for its intended use, at which time depreciation commences. We expense any data conversion or training costs as incurred. Capitalized software costs are included in property and equipment, net in our consolidated balance sheet. We capitalize costs incurred with the implementation of a cloud computing arrangement that is a service contract, consistent with our policy for software developed or obtained for internal use. The capitalized implementation costs of cloud computing arrangements are expensed over the term of the cloud computing arrangement in the same line item in the statement of operations as the associated hosting fees. Capitalized costs incurred with the implementation of a cloud computing arrangement are included in prepaid expenses and other non-current assets in our consolidated balance sheet, and in operating cash flows in our consolidated statement of cash flows. |
Share-Based Compensation | Stock-Based Compensation We compensate officers, directors and key employees with stock-based compensation under stock plans approved by our shareholders and administered under the supervision of our Board of Directors (Board). At December 28, 2019, a total of 2.1 million shares were available for future grant. These plans include non-qualified stock options and stock awards. We record stock-based compensation expense based on the award’s fair value at the grant date and the awards that are expected to vest. We recognize stock-based compensation expense over the period during which an employee is required to provide services in exchange for the award. We reduce compensation expense by estimated forfeitures. Forfeitures are estimated using historical experience and projected employee turnover. We include, as part of cash flows from operating activities, the benefit of tax deductions in excess of recognized stock-based compensation expense. In addition, excess tax benefits or deficiencies are recorded as discrete adjustments to income tax expense. Stock Options We determine the fair value of stock options granted and the resulting compensation expense at the date-of-grant using the Black-Scholes-Merton option-pricing model. Descriptions of significant assumptions used to estimate the expected volatility, risk-free interest rate and expected term are as follows: Expected Volatility – expected volatility was determined based on implied volatility of our traded options and historical volatility of our stock price. Risk-Free Interest Rate – the risk-free interest rate was based on the implied yield available on U.S. Treasury zero-coupon issues at the date of grant with a term equal to the expected term. Expected Term – expected term represents the period that our stock-based awards are expected to be outstanding and was determined based on historical experience and anticipated future exercise patterns, giving consideration to the contractual terms of unexercised stock-based awards. Stock Awards Stock Options. Certain time-based stock awards have a performance condition (performance-based). The final number of shares earned for performance-based stock awards and the related compensation expense is adjusted up or down to the extent the performance target is met. The actual number of shares that will ultimately be awarded range from 0% 200% |
Income Taxes | Income Taxes We recognize deferred tax assets and liabilities for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established for any portion of deferred tax assets that are not considered more likely than not to be realized. We evaluate all available positive and negative evidence, including our forecast of future taxable income, to assess the need for a valuation allowance on our deferred tax assets. We record a liability for unrecognized tax benefits from uncertain tax positions taken, or expected to be taken, in our tax returns. We follow a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the available evidence indicates it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount which is more than 50% likely of being realized upon ultimate settlement. We consider many factors when evaluating and estimating our tax positions and tax benefits, which may require periodic adjustments, and may not accurately forecast actual outcomes. We classify net interest and penalties related to income taxes as a component of income tax expense in our consolidated statements of operations. |
Net Income Per Share | Net Income Per Share We calculate basic net income per share by dividing net income by the weighted-average number of common shares outstanding during the period. We calculate diluted net income per share based on the weighted-average number of common shares outstanding adjusted by the number of potentially dilutive common shares as determined by the treasury stock method. Potentially dilutive shares consist of stock options and stock awards. |
Sources of Supply | Sources of Supply We currently obtain materials and components used to produce our beds from outside sources. As a result, we are dependent upon suppliers that in some instances, are our sole source of supply, or supply the vast majority of the particular component or material. We continuously evaluate opportunities to dual-source key components and materials. The failure of one or more of our suppliers to provide us with materials or components on a timely basis could significantly impact our consolidated results of operations and net income per share. While we believe that these materials and components, or suitable replacements, could be obtained from other sources in the event of a disruption or loss of supply, we may not be able to find alternative sources of supply or alternative sources of supply on comparable terms and an unexpected loss of supply over a short period of time may not allow us to replace these sources in the ordinary course of business. |
New Accounting Pronouncements | New Accounting Pronouncements Recently Adopted Accounting Guidance Effective December 30, 2018 (beginning of fiscal 2019), we adopted ASC Topic 842, Leases The new guidance establishes a right-of-use (ROU) model that requires us to recognize an ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. We have elected the following practical expedients and accounting policies related to the adoption of the new lease standard: • We did not reassess our prior conclusions about lease identification, lease classification and initial direct costs; • We did not elect the use of hindsight; • We adopted an accounting policy for short-term leases allowing us to not recognize ROU assets and lease liabilities for leases with a term of 12 months or less; and • We elected the option to not separate lease and non-lease components for all of our leases. In accordance with the new guidance on December 30, 2018, we recorded $299 million of net operating lease ROU assets and $327 million of operating lease liabilities ($52 million recorded in current operating lease liabilities and $275 million in non-current operating lease liabilities). Deferred rent and lease incentive liabilities associated with historical operating leases totaling $28 million were reclassified to the operating lease ROU assets as required by ASC Topic 842. The adoption of the new guidance had no impact on accumulated deficit, net income or net cash provided by operating activities. At December 30, 2018, our finance ROU assets and lease liabilities were not significant. See Note 1, Business and Summary of Significant Accounting Policies , Leases and N ote 7 , Leases , for further information. |
Business and Summary of Signi_3
Business and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 28, 2019 | |
Accounting Policies [Abstract] | |
Estimated Useful Lives of Property and Equipment | Estimated useful lives of our property and equipment by major asset category are as follows: Leasehold improvements 5 to 15 years Furniture and equipment 3 to 15 years Production machinery 3 to 7 years Computer equipment and software 3 to 12 years |
Warranty Liabilities | The activity in the accrued warranty liabilities account was as follows (in thousands): 2019 2018 2017 Balance at beginning of period $ 10,389 $ 9,320 $ 8,633 Additions charged to costs and expenses for current-year sales 10,949 12,385 12,214 Deductions from reserves (11,007 ) (11,743 ) (10,752 ) Change in liabilities for pre-existing warranties during the current year, including expirations 1,014 427 (775 ) Balance at end of period $ 11,345 $ 10,389 $ 9,320 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 28, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories consisted of the following (in thousands): December 28, 2019 December 29, 2018 Raw materials $ 6,231 $ 4,549 Work in progress 31 3 Finished goods 80,803 80,330 $ 87,065 $ 84,882 |
Schedule of Finished Goods Inventories | Finished goods inventories consisted of the following (in thousands): December 28, 2019 December 29, 2018 Finished beds, including retail display beds and deliveries in-transit to those customers who have utilized home delivery services $ 24,509 $ 25,313 Finished components that were ready for assembly for the completion of beds 40,139 38,665 Retail accessories 16,155 16,352 $ 80,803 $ 80,330 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 28, 2019 | |
Property And Equipment [Abstract] | |
Property, Plant and Equipment | Property and equipment consisted of the following (in thousands): December 28, 2019 December 29, 2018 Land $ — $ 1,999 Leasehold improvements 115,566 109,722 Furniture and equipment 123,161 108,841 Production machinery, computer equipment and software 245,175 238,659 Construction in progress 6,590 10,385 Less: Accumulated depreciation and amortization (293,071 ) (263,975 ) $ 197,421 $ 205,631 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets, Net (Tables) | 12 Months Ended |
Dec. 28, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of Annual Amortization for Definite-Lived Intangible Assets | Annual amortization for definite-lived intangible assets for subsequent years are as follows (in thousands): 2020 $ 2,213 2021 2,181 2022 2,181 2023 1,209 2024 — Thereafter — Total future amortization for definite-lived intangible assets $ 7,784 |
Credit Agreement (Tables)
Credit Agreement (Tables) | 12 Months Ended |
Dec. 28, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Borrowings Under Credit Facility | The following tables summarizes our borrowings under the credit facility ($ in thousands): December 28, 2019 December 29, 2018 Outstanding borrowings $ 231,000 $ 199,600 Outstanding letters of credit $ 3,497 $ 3,497 Additional borrowing capacity $ 215,503 $ 96,903 Weighted-average interest rate 3.5 % 4.2 % |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 28, 2019 | |
Leases [Abstract] | |
Schedule of Lease Costs | 2019 Operating lease costs (1) $ 86,026 Variable lease costs $ 1,809 (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 December 28, 2019, were as follows (in thousands): 2020 $ 83,232 2021 76,199 2022 67,953 2023 58,038 2024 46,113 Thereafter 120,727 Total operating lease payments (1) 452,262 Less: Interest 94,611 Present value of operating lease liabilities (2) $ 357,651 (1) Total operating lease payments exclude $43 million of legally binding minimum lease payments for leases signed but not yet commenced. (2) Includes the current portion of $60 million for operating lease liabilities. |
Schedule of Other Information Related Operating Leases | Other information related to operating leases was as follows: December 28, 2019 Weighted-average remaining lease term (years) 6.6 Weighted-average discount rate 7.2 % (in thousands) December 28, 2019 Cash paid for amounts included in present value of operating lease liabilities $ 81,718 Right-of-use assets obtained in exchange for operating lease liabilities (1) $ 75,384 (1) See Note 1, Recently Adopted Accounting Guidance |
Schedule of Rent Expense | Rent expense was as follows (in thousands): Facility Rents: 2018 2017 Minimum rents $ 71,851 $ 66,239 Contingent rents 1,847 2,845 Total $ 73,698 $ 69,084 Equipment Rents $ 5,692 $ 4,935 |
Schedule of Aggregate Minimum Rental Commitments Under Operating Leases | The aggregate minimum rental commitments under operating leases as of December 29, 2018, were expected to be as follows (in thousands): 2019 $ 78,337 2020 73,331 2021 66,491 2022 59,515 2023 51,076 Thereafter 149,318 Total future minimum lease payments $ 478,068 |
Shareholders_ Deficit (Tables)
Shareholders’ Deficit (Tables) | 12 Months Ended |
Dec. 28, 2019 | |
Shareholders Equity [Abstract] | |
Schedule of Stock-Based Compensation Expense | Total stock-based compensation expense was as follows (in thousands): 2019 2018 2017 Stock awards $ 14,265 $ 8,930 $ 13,419 Stock options 2,392 2,482 2,344 Total stock-based compensation expense (1) 16,657 11,412 15,763 Income tax benefit 3,998 2,750 5,249 Total stock-based compensation expense, net of tax $ 12,659 $ 8,662 $ 10,514 (1) |
Summary of Stock Option Activity | A summary of our stock option activity was as follows (in thousands, except per share amounts and years): Stock Options Weighted- Average Exercise Price per Share Weighted- Average Remaining Contractual Term (years) Aggregate Intrinsic Value (1) Balance at December 29, 2018 1,322 $ 22.64 5.9 $ 13,009 Granted 141 45.27 Exercised (381 ) 18.88 Canceled/Forfeited (14 ) 30.13 Outstanding at December 28, 2019 1,068 $ 26.87 6.0 $ 24,274 Exercisable at December 28, 2019 772 $ 22.88 5.1 $ 20,612 Vested and expected to vest at December 28, 2019 1,046 $ 26.70 6.0 $ 23,940 (1) Aggregate intrinsic value includes only those options where the current share price is equal to or greater than the share price on the date of grant. |
Other Information Pertaining to Options | Other information pertaining to options was as follows (in thousands, except per share amounts): 2019 2018 2017 Weighted-average grant date fair value of stock options granted $ 18.97 $ 13.96 $ 10.33 Total intrinsic value (at exercise) of stock options exercised $ 9,636 $ 3,459 $ 3,586 |
Assumptions Used to Calculate Fair Value of Options Granted Using Black-Scholes-Merton Option-Pricing Model | The assumptions used to calculate the fair value of options granted using the Black-Scholes-Merton option-pricing model were as follows: Valuation Assumptions 2019 2018 2017 Expected dividend yield 0 % 0 % 0 % Expected volatility 43 % 43 % 46 % Risk-free interest rate 2.2 % 2.7 % 2.0 % Expected term (in years) 5.4 5.0 5.1 |
Stock Award Activity | Stock award activity was as follows (in thousands, except per share amounts): Time- Based Stock Awards Weighted-Average Grant Date Fair Value Performance- and Market-Based Stock Awards Weighted-Average Grant Date Fair Value Outstanding at December 29, 2018 383 $ 28.66 1,061 $ 23.91 Granted 172 44.60 168 46.70 Vested (192 ) 25.91 (304 ) 19.50 Canceled/Forfeited (33 ) 35.26 (333 ) 22.75 Outstanding at December 28, 2019 330 $ 38.09 592 $ 33.30 |
Assumptions Used to Calculate Fair Value of Performance-based Stock Awards Using Monte Carlo Simulation Model | The assumptions used to calculate the fair value of the 2018 and 2017 performance-based stock awards with a market condition, using the Monte Carlo simulation model, were as follows: Valuation Assumptions 2019 2018 2017 Expected dividend yield NA 0 % 0 % Expected volatility NA 43 % 46 % Risk-free interest rate NA 2.6 % 1.5 % |
Schedule of Repurchase of Common Stock | Repurchases of our common stock were as follows (in thousands): 2019 2018 2017 Amount repurchased under Board-approved share repurchase program $ 145,900 $ 279,101 $ 150,000 Amount repurchased in connection with the vesting of employee restricted stock grants 9,673 3,344 5,245 Total amount repurchased (based on trade dates) $ 155,573 $ 282,445 $ 155,245 |
Net Income per Common Share | The components of basic and diluted net income per share were as follows (in thousands, except per share amounts): 2019 2018 2017 Net income $ 81,845 $ 69,539 $ 65,077 Reconciliation of weighted-average shares outstanding: Basic weighted-average shares outstanding 29,472 35,256 41,212 Dilutive effect of stock-based awards 883 909 873 Diluted weighted-average shares outstanding 30,355 36,165 42,085 Net income per share – basic $ 2.78 $ 1.97 $ 1.58 Net income per share – diluted $ 2.70 $ 1.92 $ 1.55 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Dec. 28, 2019 | |
Revenue Recognition [Abstract] | |
Schedule of Deferred Contract Liabilities and Deferred Contract Assets | 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 |
Disaggregation of Revenue | 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 |
Schedule of Sales Return Liability | 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 |
Interest Expense, Net (Tables)
Interest Expense, Net (Tables) | 12 Months Ended |
Dec. 28, 2019 | |
Interest Expense [Abstract] | |
Schedule of Interest Expense, Net | Interest expense, net, consisted of the following (in thousands): 2019 2018 2017 Interest expense $ 11,591 $ 5,911 $ 975 Interest income (4 ) (4 ) (98 ) Interest expense, net $ 11,587 $ 5,907 $ 877 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 28, 2019 | |
Income Tax Disclosure [Abstract] | |
Summary of Income Tax Expense (Benefit) | Income tax expense consisted of the following (in thousands): 2019 2018 2017 Current: Federal $ 12,299 $ 12,483 $ 19,153 State 3,293 2,871 4,046 15,592 15,354 23,199 Deferred: Federal 2,591 708 2,734 State 480 920 28 3,071 1,628 2,762 Income tax expense $ 18,663 $ 16,982 $ 25,961 |
Reconciliation of Income Tax Expense (Benefit) at the Statutory Federal Rate | The following table provides a reconciliation between the statutory federal income tax rate and our effective income tax rate: 2019 2018 2017 Statutory federal income tax 21.0 % 21.0 % 35.0 % State income taxes, net of federal benefit 3.6 3.3 2.5 Stock-based compensation (4.3 ) (1.1 ) (1.5 ) R&D tax credits (2.2 ) (2.0 ) (1.1 ) Changes in unrecognized tax benefits (0.5 ) 1.2 (0.6 ) Manufacturing deduction — — (3.5 ) Tax Cuts and Jobs Act effects — (3.9 ) (1.9 ) Other 1.0 1.1 (0.4 ) Effective income tax rate 18.6 % 19.6 % 28.5 % |
Summary of Deferred Income Taxes | The tax effects of temporary differences that give rise to deferred income taxes were as follows (in thousands): 2019 2018 Deferred tax assets: Stock-based compensation $ 8,342 $ 7,633 Operating lease liabilities (1) 90,059 — Deferred rent and lease incentives (1) — 6,994 Warranty and returns liabilities 7,215 6,857 Net operating loss carryforwards and credits 1,987 2,324 Compensation and benefits 4,698 3,699 Other 3,953 3,406 Total gross deferred tax assets 116,254 30,913 Valuation allowance (615 ) (615 ) Total gross deferred tax assets after valuation allowance 115,639 30,298 Deferred tax liabilities: Property and equipment 30,274 29,912 Operating lease right-of-use assets (1) 82,340 — Deferred revenue 3,859 1,749 Other 2,974 3,459 Total gross deferred tax liabilities 119,447 35,120 Net deferred tax liabilities $ (3,808 ) $ (4,822 ) (1) Business and summary of Significant Accounting Policies New Accounting Pronouncements Recently Adopted Accounting Guidance Leases |
Summary of Reconciliations Unrecognized Tax Benefits | Reconciliations of the beginning and ending amounts of unrecognized tax benefits were as follows (in thousands): Federal and State Tax 2019 2018 2017 Beginning balance $ 3,866 $ 2,839 $ 3,460 Increases related to current-year tax positions 638 778 330 Increases related to prior-year tax positions 134 595 87 Decreases related to prior-year tax positions (363 ) — (1,038 ) Lapse of statute of limitations (663 ) (333 ) — Settlements with taxing authorities (275 ) (13 ) — Ending balance $ 3,337 $ 3,866 $ 2,839 |
Summary of Quarterly Financia_2
Summary of Quarterly Financial Data (unaudited) (Tables) | 12 Months Ended |
Dec. 28, 2019 | |
Summary Of Quarterly Financial Data Unaudited [Abstract] | |
Summary of Quarterly Financial Data (unaudited) | The following is a condensed summary of our quarterly results (in thousands, except net income per share amounts). Quarterly diluted net income per share amounts may not total to the respective annual amount due to changes in weighted-average shares outstanding during the year. Quarter 1st 2nd 3rd 4th 2019 Net sales $ 426,445 $ 355,963 $ 474,778 $ 441,166 $ 1,698,352 Gross profit 262,233 217,186 296,390 276,114 1,051,923 Operating income 32,707 7,245 39,152 32,991 112,095 Net income 25,418 4,280 28,054 24,093 81,845 Net income per share – diluted $ 0.80 $ 0.14 $ 0.94 $ 0.82 $ 2.70 Quarter 1st 2nd 3rd 4th 2018 Net sales $ 388,633 $ 316,338 $ 414,779 $ 411,825 $ 1,531,575 Gross profit 237,477 188,888 250,517 251,079 927,961 Operating income 26,901 2,086 25,321 38,120 92,428 Net income 20,548 3,744 18,257 26,990 69,539 Net income per share – diluted $ 0.52 $ 0.10 $ 0.52 $ 0.81 $ 1.92 |
Business and Summary of Signi_4
Business and Summary of Significant Accounting Policies - Fiscal Year - Additional Information (Details) | 12 Months Ended | ||
Dec. 28, 2019 | Dec. 29, 2018 | Dec. 30, 2017 | |
Accounting Policies [Abstract] | |||
Fiscal Years | 364 days | 364 days | 364 days |
Business and Summary of Signi_5
Business and Summary of Significant Accounting Policies - Cash and Cash Equivalents - Additional Information (Details) - USD ($) $ in Millions | Dec. 28, 2019 | Dec. 29, 2018 |
Accounts Payable | ||
Cash and Cash Equivalents [Line Items] | ||
Book Overdrafts | $ 33 | $ 38 |
Business and Summary of Signi_6
Business and Summary of Significant Accounting Policies Property and Equipment - Estimated Useful Lives of Property and Equipment (Details) | 12 Months Ended |
Dec. 28, 2019 | |
Leasehold Improvements | Minimum | |
Property and equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
Leasehold Improvements | Maximum | |
Property and equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 15 years |
Furniture and Equipment | Minimum | |
Property and equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 3 years |
Furniture and Equipment | Maximum | |
Property and equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 15 years |
Production Machinery | Minimum | |
Property and equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 3 years |
Production Machinery | Maximum | |
Property and equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 7 years |
Computer Equipment and Software | Minimum | |
Property and equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 3 years |
Computer Equipment and Software | Maximum | |
Property and equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 12 years |
Business and Summary of Signi_7
Business and Summary of Significant Accounting Policies - Definite-Lived Intangible Assets - Additional Information (Details) | 12 Months Ended |
Dec. 28, 2019 | |
Minimum | |
Definite-Lived Intangible Assets [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 8 years |
Maximum | |
Definite-Lived Intangible Assets [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 10 years |
Business and Summary of Signi_8
Business and Summary of Significant Accounting Policies - Warranty Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 28, 2019 | Dec. 29, 2018 | Dec. 30, 2017 | |
Warranty Liabilities [Roll Forward] | |||
Balance at beginning of period | $ 10,389 | $ 9,320 | $ 8,633 |
Additions charged to costs and expenses for current-year sales | 10,949 | 12,385 | 12,214 |
Deductions from reserves | (11,007) | (11,743) | (10,752) |
Change in liabilities for pre-existing warranties during the current year, including expirations | 1,014 | 427 | (775) |
Balance at end of period | $ 11,345 | $ 10,389 | $ 9,320 |
Business and Summary of Signi_9
Business and Summary of Significant Accounting Policies - Dividends - Additional Information (Details) | 12 Months Ended |
Dec. 28, 2019 | |
Accounting Policies [Abstract] | |
Leverage Ratio | 375.00% |
Business and Summary of Sign_10
Business and Summary of Significant Accounting Policies - Share Repurchases - Additional Information (Details) $ in Millions | Dec. 28, 2019USD ($) |
Accounting Policies [Abstract] | |
Remaining authorized stock purchase plan | $ 475 |
Approved share repurchase program | $ 500 |
Business and Summary of Sign_11
Business and Summary of Significant Accounting Policies - Advertising Costs - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 28, 2019 | Dec. 29, 2018 | Dec. 30, 2017 | |
Advertising Expense | $ 242 | $ 210 | $ 194 |
Prepaid Expenses | |||
Prepaid Advertising | $ 2 |
Business and Summary of Sign_12
Business and Summary of Significant Accounting Policies - Insurance - Additional Information (Details) - USD ($) $ in Millions | Dec. 28, 2019 | Dec. 29, 2018 |
Self-Insurance Liability | $ 9 | $ 8 |
Compensation and Benefits | ||
Self-Insurance Liability, Current | 6 | 5 |
Other Non-current Liabilities | ||
Self-Insurance Liability, Noncurrent | $ 3 | $ 3 |
Business and Summary of Sign_13
Business and Summary of Significant Accounting Policies - Stock-Based Compensation - Additional Information (Details) - shares shares in Millions | 12 Months Ended | ||
Dec. 28, 2019 | Dec. 29, 2018 | Dec. 30, 2017 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Number of Shares Available for Grant | 2.1 | ||
Employee Stock Option | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Award Option Vesting Period | 3 years | ||
Award Expiration Period | 10 years | ||
Performance-Based Stock Award [Member] | Minimum | 2019 Performance Stock Award Grant [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Stock Awards - Shares Awarded - Increase (Decrease), Percentage | 0.00% | ||
Performance-Based Stock Award [Member] | Minimum | 2018 Performance Stock Award Grant [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Stock Awards - Shares Awarded - Increase (Decrease), Percentage | 0.00% | ||
Performance-Based Stock Award [Member] | Minimum | 2017 Performance Stock Award Grant [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Stock Awards - Shares Awarded - Increase (Decrease), Percentage | 0.00% | ||
Performance-Based Stock Award [Member] | Maximum | 2019 Performance Stock Award Grant [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Stock Awards - Shares Awarded - Increase (Decrease), Percentage | 200.00% | ||
Performance-Based Stock Award [Member] | Maximum | 2018 Performance Stock Award Grant [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Stock Awards - Shares Awarded - Increase (Decrease), Percentage | 200.00% | ||
Performance-Based Stock Award [Member] | Maximum | 2017 Performance Stock Award Grant [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Stock Awards - Shares Awarded - Increase (Decrease), Percentage | 200.00% |
Business and Summary of Sign_14
Business and Summary of Significant Accounting Policies - New Accounting Pronouncements - Additional Information (Details) - USD ($) $ in Thousands | Dec. 28, 2019 | Dec. 30, 2018 | Dec. 29, 2018 | |
Accounting Policies [Line Items] | ||||
Net Operating Lease, Right-of-Use Asset | $ 327,017 | $ 0 | ||
Operating Lease, Liability Current | 59,561 | 0 | ||
Operating Lease, Liability Noncurrent | 298,090 | $ 0 | ||
Accounting Standards Update 2016-02 | ||||
Accounting Policies [Line Items] | ||||
Net Operating Lease, Right-of-Use Asset | $ 299,000 | |||
Operating Lease Liability | 357,651 | [1] | 327,000 | |
Operating Lease, Liability Current | $ 60,000 | 52,000 | ||
Operating Lease, Liability Noncurrent | 275,000 | |||
Deferred rent and lease incentive liabilities | $ 28,000 | |||
[1] | Includes the current portion of $60 million for operating lease liabilities. |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Recurring - Level 1 - USD ($) $ in Millions | Dec. 28, 2019 | Dec. 29, 2018 |
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 | $ 8 | $ 6 |
Other Non-current Liabilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation plan liability | $ 8 | $ 6 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories (Details) - USD ($) $ in Thousands | Dec. 28, 2019 | Dec. 29, 2018 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 6,231 | $ 4,549 |
Work in progress | 31 | 3 |
Finished goods | 80,803 | 80,330 |
Inventories | $ 87,065 | $ 84,882 |
Inventories - Schedule of Finis
Inventories - Schedule of Finished Goods Inventories (Details) - USD ($) $ in Thousands | Dec. 28, 2019 | Dec. 29, 2018 |
Inventory Disclosure [Abstract] | ||
Finished beds, including retail display beds and deliveries in-transit to those customers who have utilized home delivery services | $ 24,509 | $ 25,313 |
Finished components that were ready for assembly for the completion of beds | 40,139 | 38,665 |
Retail accessories | 16,155 | 16,352 |
Finished Goods Inventory | $ 80,803 | $ 80,330 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 28, 2019 | Dec. 29, 2018 |
Property and equipment [Line Items] | ||
Less: Accumulated depreciation and amortization | $ (293,071) | $ (263,975) |
Property and equipment, net | 197,421 | 205,631 |
Land | ||
Property and equipment [Line Items] | ||
Property and equipment, gross | 0 | 1,999 |
Leasehold Improvements | ||
Property and equipment [Line Items] | ||
Property and equipment, gross | 115,566 | 109,722 |
Furniture and Equipment | ||
Property and equipment [Line Items] | ||
Property and equipment, gross | 123,161 | 108,841 |
Production machinery, computer equipment and software | ||
Property and equipment [Line Items] | ||
Property and equipment, gross | 245,175 | 238,659 |
Construction in Progress | ||
Property and equipment [Line Items] | ||
Property and equipment, gross | $ 6,590 | $ 10,385 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets, Net - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 28, 2019 | Dec. 29, 2018 | Dec. 30, 2017 | |
Goodwill And Intangible Assets [Line Items] | |||
Goodwill | $ 64 | $ 64 | |
Amortization expense definite-lived intangible assets | 2 | 2 | $ 3 |
Developed Technologies | |||
Goodwill And Intangible Assets [Line Items] | |||
Gross carrying amount | 19 | 19 | |
Accumulated amortization | 11 | 9 | |
Trade Names | |||
Goodwill And Intangible Assets [Line Items] | |||
Indefinite-lived trade name/trademarks | $ 1.4 | $ 1.4 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets, Net - Schedule of Annual Amortization for Definite-Lived Intangible Assets (Details) $ in Thousands | Dec. 28, 2019USD ($) |
Goodwill And Intangible Assets Disclosure [Abstract] | |
2020 | $ 2,213 |
2021 | 2,181 |
2022 | 2,181 |
2023 | 1,209 |
Total future amortization for definite-lived intangible assets | $ 7,784 |
Credit Agreement - Additional I
Credit Agreement - Additional Information (Details) - February 2019 Amendment $ in Millions | 12 Months Ended |
Dec. 28, 2019USD ($) | |
Line Of Credit Facility [Line Items] | |
Current borrowing capacity | $ 450 |
Maximum Borrowing Capacity | $ 600 |
Expiration Date | Feb. 29, 2024 |
Maximum leverage ratio | 450.00% |
Minimum interest coverage ratio | 300.00% |
Credit Agreement - Schedule of
Credit Agreement - Schedule of Borrowings Under Credit Facility (Details) - USD ($) $ in Thousands | Dec. 28, 2019 | Dec. 29, 2018 |
Line Of Credit Facility [Line Items] | ||
Borrowings under revolving credit facility | $ 231,000 | $ 199,600 |
February 2019 Amendment | ||
Line Of Credit Facility [Line Items] | ||
Borrowings under revolving credit facility | 231,000 | |
Outstanding letters of credit | 3,497 | |
Additional borrowing capacity | $ 215,503 | |
Weighted-average interest rate | 3.50% | |
February 2018 Amendment | ||
Line Of Credit Facility [Line Items] | ||
Borrowings under revolving credit facility | 199,600 | |
Outstanding letters of credit | 3,497 | |
Additional borrowing capacity | $ 96,903 | |
Weighted-average interest rate | 4.20% |
Leases - Additional Information
Leases - Additional Information (Details) - USD ($) $ in Millions | Dec. 28, 2019 | Dec. 29, 2018 |
ASC 840 | ||
Lessee Lease Description [Line Items] | ||
Capital lease commitments | $ 0.9 | |
Minimum | Retail Store Leases | ASC 842 | ||
Lessee Lease Description [Line Items] | ||
Lease term | 5 years | |
Minimum | Lease Vehicles and Certain Equipment Under Operating Leases | ASC 842 | ||
Lessee Lease Description [Line Items] | ||
Lease term | 3 years | |
Maximum | Retail Store Leases | ASC 842 | ||
Lessee Lease Description [Line Items] | ||
Lease term | 10 years | |
Maximum | Office and Manufacturing Leases | ASC 842 | ||
Lessee Lease Description [Line Items] | ||
Lease term | 15 years | |
Maximum | Lease Vehicles and Certain Equipment Under Operating Leases | ASC 842 | ||
Lessee Lease Description [Line Items] | ||
Lease term | 5 years |
Leases - Schedule of Lease Cost
Leases - Schedule of Lease Costs (Details) - ASC 842 $ in Thousands | 12 Months Ended | |
Dec. 28, 2019USD ($) | ||
Lessee Lease Description [Line Items] | ||
Operating lease costs | $ 86,026 | [1] |
Variable lease costs | $ 1,809 | |
[1] | Includes short-term lease costs which are not significant. |
Leases - Schedule of Maturities
Leases - Schedule of Maturities of Operating Lease Liabilities (Details) - ASC 842 - USD ($) $ in Thousands | Dec. 28, 2019 | Dec. 30, 2018 | ||
Operating Leases | ||||
2020 | $ 83,232 | |||
2021 | 76,199 | |||
2022 | 67,953 | |||
2023 | 58,038 | |||
2024 | 46,113 | |||
Thereafter | 120,727 | |||
Total operating lease payments | [1] | 452,262 | ||
Less: Interest | 94,611 | |||
Present value of operating lease liabilities | $ 357,651 | [2] | $ 327,000 | |
[1] | Total operating lease payments exclude $43 million of legally binding minimum lease payments for leases signed but not yet commenced. | |||
[2] | Includes the current portion of $60 million for operating lease liabilities. |
Leases - Schedule of Maturiti_2
Leases - Schedule of Maturities of Operating Lease Liabilities (Parenthetical) (Details) - USD ($) $ in Thousands | Dec. 28, 2019 | Dec. 30, 2018 | Dec. 29, 2018 |
Lessee Lease Description [Line Items] | |||
Operating Lease, Liability Current | $ 59,561 | $ 0 | |
ASC 842 | |||
Lessee Lease Description [Line Items] | |||
Lessee operating lease, lease not yet commenced, minimum lease payments excluded | 43,000 | ||
Operating Lease, Liability Current | $ 60,000 | $ 52,000 |
Leases - Schedule of Other Info
Leases - Schedule of Other Information Related Operating Leases (Details) - ASC 842 $ in Thousands | 12 Months Ended | |
Dec. 28, 2019USD ($) | ||
Lessee Lease Description [Line Items] | ||
Weighted-average remaining lease term (years) | 6 years 7 months 6 days | |
Weighted-average discount rate | 7.20% | |
Cash paid for amounts included in present value of operating lease liabilities | $ 81,718 | |
Right-of-use assets obtained in exchange for operating lease liabilities | $ 75,384 | [1] |
[1] | See Note 1, Recently Adopted Accounting Guidance |
Leases - Schedule of Rent Expen
Leases - Schedule of Rent Expense (Details) - ASC 840 - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 29, 2018 | Dec. 30, 2017 | |
Facility Rents | ||
Operating Leased Assets [Line Items] | ||
Minimum rents | $ 71,851 | $ 66,239 |
Contingent rents | 1,847 | 2,845 |
Total | 73,698 | 69,084 |
Equipment Rents | ||
Operating Leased Assets [Line Items] | ||
Total | $ 5,692 | $ 4,935 |
Leases - Schedule of Aggregate
Leases - Schedule of Aggregate Minimum Rental Commitments Under Operating Leases (Details) - ASC 840 $ in Thousands | Dec. 29, 2018USD ($) |
Operating Leases, Future Minimum Payments Due [Abstract] | |
2019 | $ 78,337 |
2020 | 73,331 |
2021 | 66,491 |
2022 | 59,515 |
2023 | 51,076 |
Thereafter | 149,318 |
Total future minimum lease payments | $ 478,068 |
Shareholders' Deficit - Schedul
Shareholders' Deficit - Schedule of Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 28, 2019 | Dec. 29, 2018 | Dec. 30, 2017 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | $ 16,657 | $ 11,412 | [1] | $ 15,763 |
Income tax benefit | 3,998 | 2,750 | 5,249 | |
Total stock-based compensation expense, net of tax | 12,659 | 8,662 | 10,514 | |
Time-based, Performance-based and Market-based Stock Awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | 14,265 | 8,930 | 13,419 | |
Employee Stock Option | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | $ 2,392 | $ 2,482 | $ 2,344 | |
[1] | Decrease in 2018 stock-based compensation expense reflects the cumulative impact of the change in the expected achievements of certain performance targets. |
Shareholders' Deficit - Summary
Shareholders' Deficit - Summary of Stock Option Activity (Details) - Employee Stock Option - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 28, 2019 | Dec. 29, 2018 | ||
Stock Options | |||
Balance at December 29, 2018 | 1,322 | ||
Granted | 141 | ||
Exercised | (381) | ||
Canceled/Forfeited | (14) | ||
Outstanding at December 28, 2019 | 1,068 | 1,322 | |
Exercisable at December 28, 2019 | 772 | ||
Vested and expected to vest at December 28, 2019 | 1,046 | ||
Weighted- Average Exercise Price per Share | |||
Balance at December 29, 2018 | $ 22.64 | ||
Granted | 45.27 | ||
Exercised | 18.88 | ||
Canceled/Forfeited | 30.13 | ||
Outstanding at December 28, 2019 | 26.87 | $ 22.64 | |
Exercisable at December 28, 2019 | 22.88 | ||
Vested and expected to vest at December 28, 2019 | $ 26.70 | ||
Weighted- Average Remaining Contractual Term | |||
Weighted-Average Remaining Contractual Term (years) - Outstanding | 6 years | 5 years 10 months 24 days | |
Weighted-Average Remaining Contractual Term (years) - Exercisable | 5 years 1 month 6 days | ||
Weighted-Average Remaining Contractual Term (years) - Vested and expected to vest | 6 years | ||
Aggregate Intrinsic Value | |||
Aggregate Intrinsic Value - Outstanding | [1] | $ 24,274 | $ 13,009 |
Aggregate Intrinsic Value - Exercisable | [1] | 20,612 | |
Aggregate Intrinsic Value - Vested and expected to vest | [1] | $ 23,940 | |
[1] | Aggregate intrinsic value includes only those options where the current share price is equal to or greater than the share price on the date of grant. |
Shareholders' Deficit - Other I
Shareholders' Deficit - Other Information Pertaining to Options (Details) - Employee Stock Option - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 28, 2019 | Dec. 29, 2018 | Dec. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted-average grant date fair value of stock options granted | $ 18.97 | $ 13.96 | $ 10.33 |
Total intrinsic value (at exercise) of stock options exercised | $ 9,636 | $ 3,459 | $ 3,586 |
Shareholders' Deficit - Additio
Shareholders' Deficit - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 28, 2019 | Dec. 29, 2018 | Dec. 30, 2017 | |
Employee Stock Option | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Proceeds from stock options exercised | $ 7.2 | ||
Tax benefit from exercise of stock options | 2.4 | ||
Stock-based compensation expense related to non-vested awards | $ 2.9 | ||
Weighted average period to recognize remaining expense over | 1 year 9 months 18 days | ||
Restricted Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense related to non-vested awards | $ 7.8 | ||
Weighted average period to recognize remaining expense over | 1 year 10 months 24 days | ||
Performance-based stock award, granted | 172,000 | ||
Weighted-average grant date fair value | $ 44.60 | ||
Performance-Based and Market-Based Stock Award | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense related to non-vested awards | $ 12.3 | ||
Weighted average period to recognize remaining expense over | 1 year 10 months 24 days | ||
Performance-based stock award, granted | 168,000 | ||
Weighted-average grant date fair value | $ 46.70 | ||
Performance-Based Stock Award with a Market Condition | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Performance-based stock award, granted | 5,027 | 270,895 | |
Weighted-average grant date fair value | $ 35.97 | $ 22.40 | |
Fair value assumptions, method used | Monte Carlo simulation model |
Shareholders' Deficit - Assumpt
Shareholders' Deficit - Assumptions Used to Calculate Fair Value of Options Granted Using Black-Scholes-Merton Option-Pricing Model (Details) - Employee Stock Option | 12 Months Ended | ||
Dec. 28, 2019 | Dec. 29, 2018 | Dec. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Expected volatility | 43.00% | 43.00% | 46.00% |
Risk-free interest rate | 2.20% | 2.70% | 2.00% |
Expected term (in years) | 5 years 4 months 24 days | 5 years | 5 years 1 month 6 days |
Shareholders' Deficit - Stock A
Shareholders' Deficit - Stock Award Activity (Details) shares in Thousands | 12 Months Ended |
Dec. 28, 2019$ / sharesshares | |
Restricted Stock | |
Stock awards [Roll Forward] | |
Outstanding at December 29, 2018 | shares | 383 |
Granted | shares | 172 |
Vested | shares | (192) |
Canceled/Forfeited | shares | (33) |
Outstanding at December 28, 2019 | shares | 330 |
Weighted-Average Grant Date Fair Value | |
Outstanding at December 29, 2018 | $ / shares | $ 28.66 |
Granted | $ / shares | 44.60 |
Vested | $ / shares | 25.91 |
Canceled/Forfeited | $ / shares | 35.26 |
Outstanding at December 28, 2019 | $ / shares | $ 38.09 |
Performance-Based and Market-Based Stock Award | |
Stock awards [Roll Forward] | |
Outstanding at December 29, 2018 | shares | 1,061 |
Granted | shares | 168 |
Vested | shares | (304) |
Canceled/Forfeited | shares | (333) |
Outstanding at December 28, 2019 | shares | 592 |
Weighted-Average Grant Date Fair Value | |
Outstanding at December 29, 2018 | $ / shares | $ 23.91 |
Granted | $ / shares | 46.70 |
Vested | $ / shares | 19.50 |
Canceled/Forfeited | $ / shares | 22.75 |
Outstanding at December 28, 2019 | $ / shares | $ 33.30 |
Shareholders' Deficit - Assum_2
Shareholders' Deficit - Assumptions Used to Calculate Fair Value of Performance-based Stock Awards Using Monte Carlo Simulation Model (Details) - Performance-Based Stock Award with a Market Condition | 12 Months Ended | |
Dec. 29, 2018 | Dec. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected dividend yield | 0.00% | 0.00% |
Expected volatility | 43.00% | 46.00% |
Risk-free interest rate | 2.60% | 1.50% |
Shareholders' Deficit - Sched_2
Shareholders' Deficit - Schedule of Repurchase of Common Stock (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 28, 2019 | Dec. 29, 2018 | Dec. 30, 2017 | |
Repurchases Of Common Stock [Abstract] | |||
Amount repurchased under Board-approved share repurchase program | $ 145,900 | $ 279,101 | $ 150,000 |
Amount repurchased in connection with the vesting of employee restricted stock grants | 9,673 | 3,344 | 5,245 |
Total amount repurchased (based on trade dates) | $ 155,573 | $ 282,445 | $ 155,245 |
Shareholders' Deficit - Repurch
Shareholders' Deficit - Repurchase of Common Stock - Additional Information (Details) $ in Millions | Dec. 28, 2019USD ($) |
Shareholders Equity [Abstract] | |
Remaining authorized stock purchase plan | $ 475 |
Shareholders' Deficit - Compone
Shareholders' Deficit - Components of Basic and Diluted Net Income per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 28, 2019 | Sep. 28, 2019 | Jun. 29, 2019 | Mar. 30, 2019 | Dec. 29, 2018 | Sep. 29, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 28, 2019 | Dec. 29, 2018 | Dec. 30, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||||||
Net income | $ 24,093 | $ 28,054 | $ 4,280 | $ 25,418 | $ 26,990 | $ 18,257 | $ 3,744 | $ 20,548 | $ 81,845 | $ 69,539 | $ 65,077 |
Basic weighted-average shares outstanding | 29,472,000 | 35,256,000 | 41,212,000 | ||||||||
Dilutive effect of stock-based awards | 883,000 | 909,000 | 873,000 | ||||||||
Diluted weighted-average shares outstanding | 30,355,000 | 36,165,000 | 42,085,000 | ||||||||
Net income per share – basic | $ 2.78 | $ 1.97 | $ 1.58 | ||||||||
Net income per share – diluted | $ 0.82 | $ 0.94 | $ 0.14 | $ 0.80 | $ 0.81 | $ 0.52 | $ 0.10 | $ 0.52 | $ 2.70 | $ 1.92 | $ 1.55 |
Employee Stock Option | |||||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||||||
Antidilutive securities excluded from computation of earnings per share, amount | 200,000 | 200,000 | 400,000 |
Revenue Recognition - Schedule
Revenue Recognition - Schedule of Deferred Contract Liabilities and Deferred Contract Assets (Details) - USD ($) $ in Thousands | Dec. 28, 2019 | Dec. 29, 2018 |
Disaggregation Of Revenue [Line Items] | ||
Deferred Contract Assets | $ 57,350 | $ 50,009 |
Deferred Contract Liabilities | 79,174 | 74,589 |
Other Current Assets | ||
Disaggregation Of Revenue [Line Items] | ||
Deferred Contract Assets | 23,568 | 20,553 |
Other Non-current Assets | ||
Disaggregation Of Revenue [Line Items] | ||
Deferred Contract Assets | 33,782 | 29,456 |
Other Current Liabilities | ||
Disaggregation Of Revenue [Line Items] | ||
Deferred Contract Liabilities | 34,204 | 32,395 |
Other Non-current Liabilities | ||
Disaggregation Of Revenue [Line Items] | ||
Deferred Contract Liabilities | $ 44,970 | $ 42,194 |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 28, 2019 | Dec. 29, 2018 | Dec. 30, 2017 | |
Disaggregation Of Revenue [Line Items] | |||
Revenue recognized, included in beginning deferred contract liability balance | $ 32 | ||
Transferred at Point in Time | |||
Disaggregation Of Revenue [Line Items] | |||
Revenue from goods and services transferred to customers at a point in time | 98.00% | 98.00% | 98.00% |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 28, 2019 | Sep. 28, 2019 | Jun. 29, 2019 | Mar. 30, 2019 | Dec. 29, 2018 | Sep. 29, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 28, 2019 | Dec. 29, 2018 | Dec. 30, 2017 | |
Disaggregation Of Revenue [Line Items] | |||||||||||
Net Sales | $ 441,166 | $ 474,778 | $ 355,963 | $ 426,445 | $ 411,825 | $ 414,779 | $ 316,338 | $ 388,633 | $ 1,698,352 | $ 1,531,575 | $ 1,444,497 |
Retail | |||||||||||
Disaggregation Of Revenue [Line Items] | |||||||||||
Net Sales | 1,558,638 | 1,401,991 | 1,324,690 | ||||||||
Online and Phone | |||||||||||
Disaggregation Of Revenue [Line Items] | |||||||||||
Net Sales | 129,257 | 115,831 | 101,145 | ||||||||
Company-Controlled Channel | |||||||||||
Disaggregation Of Revenue [Line Items] | |||||||||||
Net Sales | 1,687,895 | 1,517,822 | 1,425,835 | ||||||||
Wholesale/Other Channel | |||||||||||
Disaggregation Of Revenue [Line Items] | |||||||||||
Net Sales | $ 10,457 | $ 13,753 | $ 18,662 |
Revenue Recognition - Schedul_2
Revenue Recognition - Schedule of Sales Return Liability (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 28, 2019 | Dec. 29, 2018 | |
Sales Return Liability [Roll Forward] | ||
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 |
Profit Sharing and 401(k) Plan
Profit Sharing and 401(k) Plan - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 28, 2019 | Dec. 29, 2018 | Dec. 30, 2017 | |
Profit Sharing And401 K Plan [Abstract] | |||
Employee compensation deferral (in hundredths) | 50.00% | ||
Employer Contributions | $ 6 | $ 5 | $ 5 |
Interest Expense, Net - Schedul
Interest Expense, Net - Schedule of Interest Expense, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 28, 2019 | Dec. 29, 2018 | Dec. 30, 2017 | |
Interest Expense [Abstract] | |||
Interest expense | $ 11,591 | $ 5,911 | $ 975 |
Interest income | (4) | (4) | (98) |
Interest expense, net | $ 11,587 | $ 5,907 | $ 877 |
Income Taxes - Summary of Incom
Income Taxes - Summary of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 28, 2019 | Dec. 29, 2018 | Dec. 30, 2017 | |
Current: | |||
Federal | $ 12,299 | $ 12,483 | $ 19,153 |
State | 3,293 | 2,871 | 4,046 |
Current income tax expense | 15,592 | 15,354 | 23,199 |
Deferred: | |||
Federal | 2,591 | 708 | 2,734 |
State | 480 | 920 | 28 |
Deferred income tax expense | 3,071 | 1,628 | 2,762 |
Income tax expense | $ 18,663 | $ 16,982 | $ 25,961 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Income Tax Expense (Benefit) at the Statutory Federal Rate (Details) | 12 Months Ended | ||
Dec. 28, 2019 | Dec. 29, 2018 | Dec. 30, 2017 | |
Income Tax Disclosure [Abstract] | |||
Statutory federal income tax | 21.00% | 21.00% | 35.00% |
State income taxes, net of federal benefit | 3.60% | 3.30% | 2.50% |
Stock-based compensation | (4.30%) | (1.10%) | (1.50%) |
R&D tax credits | (2.20%) | (2.00%) | (1.10%) |
Changes in unrecognized tax benefits | (0.50%) | 1.20% | (0.60%) |
Manufacturing deduction | 0.00% | 0.00% | (3.50%) |
Tax Cuts and Jobs Act effects | 0.00% | (3.90%) | (1.90%) |
Other | 1.00% | 1.10% | (0.40%) |
Effective income tax rate | 18.60% | 19.60% | 28.50% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 28, 2019 | Dec. 29, 2018 | Dec. 30, 2017 | |
Income Taxes [Line Items] | |||
2017 TCJA provisional tax benefit | $ 2,900 | $ 1,700 | |
Statutory federal income tax | 21.00% | 21.00% | 35.00% |
Valuation allowance | $ 615 | $ 615 | |
Federal | |||
Income Taxes [Line Items] | |||
Operating loss carryforwards | $ 1,000 | ||
Federal | Minimum | |||
Income Taxes [Line Items] | |||
Operating loss carryforwards, expiration year | 2025 | ||
Federal | Maximum | |||
Income Taxes [Line Items] | |||
Operating loss carryforwards, expiration year | 2027 | ||
State | |||
Income Taxes [Line Items] | |||
Operating loss carryforwards | $ 1,000 | ||
State | Minimum | |||
Income Taxes [Line Items] | |||
Operating loss carryforwards, expiration year | 2028 | ||
State | Maximum | |||
Income Taxes [Line Items] | |||
Operating loss carryforwards, expiration year | 2034 |
Income Taxes - Summary of Defer
Income Taxes - Summary of Deferred Income Taxes (Details) - USD ($) $ in Thousands | Dec. 28, 2019 | Dec. 29, 2018 | |
Deferred Tax Assets [Abstract] | |||
Stock-based compensation | $ 8,342 | $ 7,633 | |
Operating lease liabilities | [1] | 90,059 | |
Deferred rent and lease incentives | [1] | 6,994 | |
Warranty and returns liabilities | 7,215 | 6,857 | |
Net operating loss carryforwards and credits | 1,987 | 2,324 | |
Compensation and benefits | 4,698 | 3,699 | |
Other | 3,953 | 3,406 | |
Total gross deferred tax assets | 116,254 | 30,913 | |
Valuation allowance | (615) | (615) | |
Total gross deferred tax assets after valuation allowance | 115,639 | 30,298 | |
Deferred Tax Liabilities [Abstract] | |||
Property and equipment | 30,274 | 29,912 | |
Operating lease right-of-use assets | [1] | 82,340 | |
Deferred revenue | 3,859 | 1,749 | |
Other | 2,974 | 3,459 | |
Total gross deferred tax liabilities | 119,447 | 35,120 | |
Net deferred tax liabilities | $ (3,808) | $ (4,822) | |
[1] | (1) Business and summary of Significant Accounting Policies New Accounting Pronouncements Recently Adopted Accounting Guidance Leases |
Income Taxes - Summary of Recon
Income Taxes - Summary of Reconciliations Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 28, 2019 | Dec. 29, 2018 | Dec. 30, 2017 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Beginning balance | $ 3,866 | $ 2,839 | $ 3,460 |
Increases related to current-year tax positions | 638 | 778 | 330 |
Increases related to prior-year tax positions | 134 | 595 | 87 |
Decreases related to prior-year tax positions | (363) | 0 | (1,038) |
Lapse of statute of limitations | (663) | (333) | 0 |
Settlements with taxing authorities | (275) | (13) | 0 |
Ending balance | 3,337 | 3,866 | $ 2,839 |
Unrecognized tax benefits that would impact effective tax rate | $ 3,000 | $ 4,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | 12 Months Ended |
Dec. 28, 2019USD ($)lease_commitment | |
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |
Inventory Purchase Commitments | $ 22 |
Purchase Commitment | Future Retail Sites | |
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |
Number of future retail store and distribution center lease commitments | lease_commitment | 31 |
Future retail store leases, total lease payments | $ 43 |
Minimum | Purchase Commitment | Future Retail Sites | |
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |
Future retail store lease commitments term | 3 years |
Maximum | Purchase Commitment | Future Retail Sites | |
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |
Future retail store lease commitments term | 10 years |
Summary of Quarterly Financia_3
Summary of Quarterly Financial Data (unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 28, 2019 | Sep. 28, 2019 | Jun. 29, 2019 | Mar. 30, 2019 | Dec. 29, 2018 | Sep. 29, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 28, 2019 | Dec. 29, 2018 | Dec. 30, 2017 | |
Summary Of Quarterly Financial Data Unaudited [Abstract] | |||||||||||
Net sales | $ 441,166 | $ 474,778 | $ 355,963 | $ 426,445 | $ 411,825 | $ 414,779 | $ 316,338 | $ 388,633 | $ 1,698,352 | $ 1,531,575 | $ 1,444,497 |
Gross profit | 276,114 | 296,390 | 217,186 | 262,233 | 251,079 | 250,517 | 188,888 | 237,477 | 1,051,923 | 927,961 | 897,347 |
Operating income | 32,991 | 39,152 | 7,245 | 32,707 | 38,120 | 25,321 | 2,086 | 26,901 | 112,095 | 92,428 | 91,915 |
Net income | $ 24,093 | $ 28,054 | $ 4,280 | $ 25,418 | $ 26,990 | $ 18,257 | $ 3,744 | $ 20,548 | $ 81,845 | $ 69,539 | $ 65,077 |
Net income per share – diluted | $ 0.82 | $ 0.94 | $ 0.14 | $ 0.80 | $ 0.81 | $ 0.52 | $ 0.10 | $ 0.52 | $ 2.70 | $ 1.92 | $ 1.55 |
Schedule II - Valuation and Q_2
Schedule II - Valuation and Qualifying Accounts (Details) - Allowance for Doubtful Accounts - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 28, 2019 | Dec. 29, 2018 | Dec. 30, 2017 | |
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at beginning of period | $ 699 | $ 714 | $ 884 |
Additions charged to costs and expenses | 1,391 | 815 | 915 |
Deductions from reserves | (1,192) | (830) | (1,085) |
Balance at end of period | $ 898 | $ 699 | $ 714 |