advance auto parts , inc . and subsidiaries notes to consolidated financial statements 2013 ( continued ) december 30 , 2006 , december 31 , 2005 and january 1 , 2005 ( in thousands , except per share data ) 8 . inventories , net inventories are stated at the lower of cost or market , cost being determined using the last-in , first-out ( "lifo" ) method for approximately 93% ( 93 % ) of inventories at both december 30 , 2006 and december 31 , 2005 . under the lifo method , the company 2019s cost of sales reflects the costs of the most currently purchased inventories while the inventory carrying balance represents the costs relating to prices paid in prior years . the company 2019s costs to acquire inventory have been generally decreasing in recent years as a result of its significant growth . accordingly , the cost to replace inventory is less than the lifo balances carried for similar product . as a result of the lifo method and the ability to obtain lower product costs , the company recorded a reduction to cost of sales of $ 9978 for fiscal year ended 2006 , an increase in cost of sales of $ 526 for fiscal year ended 2005 and a reduction to cost of sales of $ 11212 for fiscal year ended 2004 . the remaining inventories are comprised of product cores , which consist of the non-consumable portion of certain parts and batteries and are valued under the first-in , first-out ( "fifo" ) method . core values are included as part of our merchandise costs and are either passed on to the customer or returned to the vendor . additionally , these products are not subject to the frequent cost changes like our other merchandise inventory , thus , there is no material difference from applying either the lifo or fifo valuation methods . the company capitalizes certain purchasing and warehousing costs into inventory . purchasing and warehousing costs included in inventory , at fifo , at december 30 , 2006 and december 31 , 2005 , were $ 95576 and $ 92833 , respectively . inventories consist of the following : december 30 , december 31 , 2006 2005 .

Table: december 30 2006 december 31 2005 inventories at fifo net $ 1380573 $ 1294310 adjustments to state inventories at lifo 82767 72789 inventories at lifo net $ 1463340 $ 1367099

replacement cost approximated fifo cost at december 30 , 2006 and december 31 , 2005 . inventory quantities are tracked through a perpetual inventory system . the company uses a cycle counting program in all distribution centers , parts delivered quickly warehouses , or pdqs , local area warehouses , or laws , and retail stores to ensure the accuracy of the perpetual inventory quantities of both merchandise and core inventory . the company establishes reserves for estimated shrink based on historical accuracy and effectiveness of the cycle counting program . the company also establishes reserves for potentially excess and obsolete inventories based on current inventory levels and the historical analysis of product sales and current market conditions . the nature of the company 2019s inventory is such that the risk of obsolescence is minimal and excess inventory has historically been returned to the company 2019s vendors for credit . the company provides reserves when less than full credit is expected from a vendor or when liquidating product will result in retail prices below recorded costs . the company 2019s reserves against inventory for these matters were $ 31376 and $ 22825 at december 30 , 2006 and december 31 , 2005 , respectively . 9 . property and equipment : property and equipment are stated at cost , less accumulated depreciation . expenditures for maintenance and repairs are charged directly to expense when incurred ; major improvements are capitalized . when items are sold or retired , the related cost and accumulated depreciation are removed from the accounts , with any gain or loss reflected in the consolidated statements of operations . depreciation of land improvements , buildings , furniture , fixtures and equipment , and vehicles is provided over the estimated useful lives , which range from 2 to 40 years , of the respective assets using the straight-line method. .

Question: what is the percentage increase in inventories due to the adoption of lifo in 2006?
Answer: 6.0%
Calculation: divide(82767, 1380573)