Inventory/Sales Ratio
1.36 ▼
Elevated · MoM: -0.01
Total Inventories
$2,680,732M
Business inventories represent the total value of goods held by manufacturers, wholesalers, and retailers. They are a key economic indicator, reflecting supply and demand dynamics and future production expectations. The inventory-to-sales (I/S) ratio measures how many months of sales can be covered by current inventory levels.
Business Inventories
Business Inventories Components
| Measure |
Current |
MoM |
YoY |
| Total Business Inventories |
$2,680,732M |
+0.1% |
+1.6% |
| Inventory/Sales Ratio |
1.36 |
-0.01 |
-0.03 |
As of December 2025, total business inventories reached $2,680,732 million, showing a modest month-over-month increase of +0.1% and a year-over-year growth of +1.6%. The inventory-to-sales ratio stands at 1.36, indicating that businesses hold 1.36 months of sales in inventory. This suggests a continued effort towards destocking despite the slight overall inventory increase.
Inventory Regime
Inventory Regime
Elevated Inventories
The current regime is characterized by elevated inventories and a clear trend of destocking. This implies that businesses are actively working to reduce their stock levels, likely in response to past overstocking or anticipated shifts in consumer demand. This destocking phase can lead to reduced orders from manufacturers in the near term.
Inventory/Sales Ratio Trend
Historical Parallels
| Date | I/S Ratio | 3M Later | 6M Later |
|---|
| Jun 2025 |
1.38 |
1.37 |
1.36 |
| May 2025 |
1.39 |
1.37 |
1.37 |
| Apr 2025 |
1.38 |
1.37 |
1.38 |
| Mar 2025 |
1.38 |
1.38 |
1.37 |
| Feb 2025 |
1.39 |
1.39 |
1.37 |
An inventory-to-sales ratio of 1.36, coupled with an elevated inventory regime and destocking trend, often precedes periods where businesses prioritize clearing existing stock over aggressive new production. Historically, such conditions can indicate a potential slowdown in manufacturing activity as firms align supply with more conservative demand forecasts. This focus on inventory reduction can also lead to increased promotional activity to stimulate sales.
Market Snapshot
Note: Business Inventories is a monthly report with limited direct market impact. Market data shown below reflects broad conditions.
Market Snapshot
Top Movers
| Stock | Gap | 1M |
|---|
| TRINZ Trinity Capital Inc. 7.875% Notes due 2029 |
+247.87% |
-71.2% |
| OXLCI Oxford Lane Capital Corp. |
+220.75% |
-68.8% |
| NMFCZ New Mountain Finance Corporation 8.250% Notes due 2028 |
+219.39% |
-68.7% |
| ADAMI Adamas Trust, Inc. |
+194.87% |
-66.1% |
| MFAN MFA Financial, Inc. 8.875% Senior Notes |
+191.87% |
-65.6% |
Bottom Movers
| Stock | Gap | 1M |
|---|
| OLMA Olema Pharmaceuticals, Inc. |
-37.17% |
-18.2% |
| MHLA Maiden Holdings, Ltd. 6.625 NT 2046 |
-14.94% |
+10.5% |
| ORIC ORIC Pharmaceuticals, Inc. |
-13.84% |
+29.2% |
| SLMBP SLM Corporation |
-10.00% |
+0.0% |
| AMPX Amprius Technologies, Inc. |
-9.80% |
+31.7% |
The broader market context shows the S&P 500 at $6740, experiencing a -2.1% decline over the past month. While inventory data provides insight into economic activity, this specific release, with its modest changes, is likely to have a limited immediate impact on the overall market sentiment, which may be influenced by broader macroeconomic factors.
Sector Performance
Sector Performance
| ETF |
Price |
Open Gap |
1M |
6M |
1Y |
YTD |
VS S&P 500 |
| XLY Consumer Discretionary |
$114.44 |
-1.30% |
-4.7% |
-2.3% |
+9.2% |
-4.2% |
-2.6% |
| XLP Consumer Staples |
$85.78 |
-1.00% |
-1.4% |
+8.0% |
+6.9% |
+10.4% |
+0.7% |
| XLI Industrials |
$169.94 |
-1.10% |
+0.3% |
+13.0% |
+28.7% |
+9.6% |
+2.4% |
| XLK Technology |
$137.29 |
+0.39% |
-0.6% |
+4.8% |
+24.7% |
-4.6% |
+1.5% |
Retail & Logistics Stocks
Retail & Logistics Stocks
| Stock |
Price |
Open Gap |
1M |
6M |
1Y |
YTD |
VS S&P 500 |
| KR Kroger |
$74.11 |
-3.32% |
+10.9% |
+9.2% |
+19.7% |
+18.6% |
+13.0% |
| TGT Target |
$120.79 |
-1.59% |
+5.8% |
+30.3% |
+5.9% |
+23.6% |
+7.9% |
| COST Costco |
$998.10 |
+0.15% |
+2.0% |
+4.6% |
-4.3% |
+15.7% |
+4.1% |
| FDX FedEx |
$359.10 |
+1.63% |
-0.9% |
+60.4% |
+46.0% |
+24.3% |
+1.1% |
| DG Dollar General |
$146.31 |
-0.88% |
-2.0% |
+35.7% |
+102.0% |
+10.7% |
+0.1% |
| WMT Walmart |
$123.80 |
-0.09% |
-3.3% |
+22.7% |
+30.0% |
+11.1% |
-1.2% |
| HD Home Depot |
$357.92 |
-0.11% |
-7.6% |
-13.1% |
-5.7% |
+4.0% |
-5.5% |
| AMZN Amazon |
$213.21 |
+0.83% |
-8.5% |
-9.5% |
+2.3% |
-7.6% |
-6.4% |
| LOW Lowe's |
$251.89 |
-0.91% |
-8.7% |
-4.3% |
+5.3% |
+4.4% |
-6.6% |
| UPS UPS |
$102.36 |
-0.48% |
-12.3% |
+21.2% |
-10.9% |
+3.2% |
-10.2% |
For retail and logistics stocks, the destocking trend suggests potential headwinds. Retailers may face pressure on margins due to discounting to move excess inventory, while logistics companies could see a temporary dip in shipping volumes for new goods. However, efficient inventory management during this phase could differentiate stronger players.
Positioning
In this environment, retail companies may focus on optimizing supply chains and implementing targeted promotions to manage inventory effectively. Logistics firms might need to adapt to potentially lower new order volumes, emphasizing warehousing and reverse logistics. Consumers could benefit from increased sales and discounts as businesses aim to clear their elevated stock levels.