<?xml version="1.0" encoding="us-ascii"?><InstanceReport xmlns:xsi="http://www.w3.org/2001/XMLSchema-instance" xmlns:xsd="http://www.w3.org/2001/XMLSchema"><Version>2.2.0.25</Version><hasSegments>false</hasSegments><hasScenarios>false</hasScenarios><ReportLongName>10 - Disclosure - INVENTORIES</ReportLongName><DisplayLabelColumn>true</DisplayLabelColumn><ShowElementNames>false</ShowElementNames><RoundingOption /><HasEmbeddedReports>false</HasEmbeddedReports><Columns><Column><Id>1</Id><IsAbstractGroupTitle>false</IsAbstractGroupTitle><LabelColumn>false</LabelColumn><CurrencyCode>USD</CurrencyCode><FootnoteIndexer /><hasSegments>false</hasSegments><hasScenarios>false</hasScenarios><MCU><KeyName>1/1/2011 - 4/2/2011
USD ($)

USD ($) / shares

</KeyName><CurrencySymbol>$</CurrencySymbol><contextRef><ContextID>Context_3ME_02-Apr-2011</ContextID><EntitySchema>http://www.sec.gov/CIK</EntitySchema><EntityValue>0000095029</EntityValue><PeriodDisplayName /><PeriodType>duration</PeriodType><PeriodStartDate>2011-01-01T00:00:00</PeriodStartDate><PeriodEndDate>2011-04-02T00:00:00</PeriodEndDate><Segments /><Scenarios /></contextRef><UPS><UnitProperty><UnitID>USD</UnitID><UnitType>Standard</UnitType><StandardMeasure><MeasureSchema>http://www.xbrl.org/2003/iso4217</MeasureSchema><MeasureValue>USD</MeasureValue><MeasureNamespace>iso4217</MeasureNamespace></StandardMeasure><Scale>0</Scale></UnitProperty><UnitProperty><UnitID>USDEPS</UnitID><UnitType>Divide</UnitType><NumeratorMeasure><MeasureSchema>http://www.xbrl.org/2003/iso4217</MeasureSchema><MeasureValue>USD</MeasureValue><MeasureNamespace>iso4217</MeasureNamespace></NumeratorMeasure><DenominatorMeasure><MeasureSchema>http://www.xbrl.org/2003/instance</MeasureSchema><MeasureValue>shares</MeasureValue><MeasureNamespace>xbrli</MeasureNamespace></DenominatorMeasure><Scale>0</Scale></UnitProperty><UnitProperty><UnitID>Shares</UnitID><UnitType>Standard</UnitType><StandardMeasure><MeasureSchema>http://www.xbrl.org/2003/instance</MeasureSchema><MeasureValue>shares</MeasureValue><MeasureNamespace>xbrli</MeasureNamespace></StandardMeasure><Scale>0</Scale></UnitProperty></UPS><CurrencyCode>USD</CurrencyCode><OriginalCurrencyCode>USD</OriginalCurrencyCode></MCU><CurrencySymbol>$</CurrencySymbol><Labels><Label Id="1" Label="3 Months Ended" /><Label Id="2" Label="Apr. 02, 2011" /></Labels></Column></Columns><Rows><Row><Id>2</Id><IsAbstractGroupTitle>true</IsAbstractGroupTitle><Level>0</Level><ElementName>rgr_InventoryDisclosureAbstract</ElementName><ElementPrefix>rgr</ElementPrefix><IsBaseElement>false</IsBaseElement><BalanceType>na</BalanceType><PeriodType>duration</PeriodType><ShortDefinition>No definition available.</ShortDefinition><IsReportTitle>false</IsReportTitle><IsSegmentTitle>false</IsSegmentTitle><IsSubReportEnd>false</IsSubReportEnd><IsCalendarTitle>false</IsCalendarTitle><IsTuple>false</IsTuple><IsEquityPrevioslyReportedAsRow>false</IsEquityPrevioslyReportedAsRow><IsEquityAdjustmentRow>false</IsEquityAdjustmentRow><IsBeginningBalance>false</IsBeginningBalance><IsEndingBalance>false</IsEndingBalance><IsReverseSign>false</IsReverseSign><PreferredLabelRole /><FootnoteIndexer /><Cells><Cell><Id>1</Id><IsNumeric>false</IsNumeric><IsRatio>false</IsRatio><DisplayZeroAsNone>false</DisplayZeroAsNone><NumericAmount>0</NumericAmount><RoundedNumericAmount>0</RoundedNumericAmount><NonNumbericText /><NonNumericTextHeader /><FootnoteIndexer /><CurrencyCode /><CurrencySymbol /><IsIndependantCurrency>false</IsIndependantCurrency><ShowCurrencySymbol>false</ShowCurrencySymbol><DisplayDateInUSFormat>false</DisplayDateInUSFormat><hasSegments>false</hasSegments><hasScenarios>false</hasScenarios></Cell></Cells><OriginalInstanceReportColumns /><Unit>Other</Unit><ElementDataType>xbrli:stringItemType</ElementDataType><SimpleDataType>string</SimpleDataType><ElementDefenition>No definition available.</ElementDefenition><IsTotalLabel>false</IsTotalLabel><IsEPS>false</IsEPS><Label>Inventory Disclosure [Abstract]</Label></Row><Row><Id>3</Id><IsAbstractGroupTitle>false</IsAbstractGroupTitle><Level>0</Level><ElementName>us-gaap_InventoryDisclosureTextBlock</ElementName><ElementPrefix>us-gaap</ElementPrefix><IsBaseElement>true</IsBaseElement><BalanceType>na</BalanceType><PeriodType>duration</PeriodType><ShortDefinition>No definition available.</ShortDefinition><IsReportTitle>false</IsReportTitle><IsSegmentTitle>false</IsSegmentTitle><IsSubReportEnd>false</IsSubReportEnd><IsCalendarTitle>false</IsCalendarTitle><IsTuple>false</IsTuple><IsEquityPrevioslyReportedAsRow>false</IsEquityPrevioslyReportedAsRow><IsEquityAdjustmentRow>false</IsEquityAdjustmentRow><IsBeginningBalance>false</IsBeginningBalance><IsEndingBalance>false</IsEndingBalance><IsReverseSign>false</IsReverseSign><PreferredLabelRole>verboselabel</PreferredLabelRole><FootnoteIndexer /><Cells><Cell><Id>1</Id><IsNumeric>false</IsNumeric><IsRatio>false</IsRatio><DisplayZeroAsNone>false</DisplayZeroAsNone><NumericAmount>0</NumericAmount><RoundedNumericAmount>0</RoundedNumericAmount><NonNumbericText>&lt;p style="font-style:times new roman;font-size:10pt;text-align:left;"&gt;NOTE 3 - INVENTORIES&lt;/p&gt;
&lt;p style="font-style:times new roman;font-size:10pt;text-align:left; text-indent:25px;"&gt;Inventories are valued using the last-in, first-out (LIFO) method. An actual valuation of inventory under the LIFO method can be made only at the end of each year based on the inventory levels and costs existing at that time. Accordingly, interim LIFO calculations must necessarily be based on management's estimates of expected year-end inventory levels and costs. Because these are subject to many factors beyond management's control, interim results are subject to the final year-end LIFO inventory valuation.&lt;/p&gt;
&lt;p style="font-style:times new roman;font-size:10pt;text-align:left; text-indent:25px;"&gt;During the three month period ended April 2, 2011, inventory quantities were reduced. If this reduction remains through year-end, it will result in a liquidation of LIFO inventory quantities carried at lower costs prevailing in prior years as compared with the current cost of purchases. Although the effect of such a liquidation cannot be precisely quantified at the present time, management believes that if a LIFO liquidation continues to occur in 2011, the impact may be material to the Company's results of operations for the period but will not have a material impact on the financial position of the Company.&lt;/p&gt;
&lt;p style="font-style:times new roman;font-size:10pt;text-align:left; text-indent:25px;"&gt;Inventories consist of the following:&lt;/p&gt;
&lt;table align="center" cellspacing="0" border="0" width="100%"&gt;
&lt;tr&gt;
&lt;td width="60%" style="vertical-align:top; border-top:1px solid black;border-bottom:1px solid black; border-right:1px solid black;"&gt;
&lt;p style="font-style:times new roman;font-size:10pt;text-align:left;"&gt;&amp;#160;&lt;/p&gt;
	&lt;/td&gt;
	&lt;td width="20%" colspan="2" style="vertical-align:top; border-top:1px solid black;border-bottom:1px solid black; border-right:1px solid black;"&gt;
&lt;p style="font-style:times new roman;font-size:10pt;text-align:center;"&gt;April 2, 2011&lt;/p&gt;
	&lt;/td&gt;
	&lt;td width="20%" colspan="2" style="vertical-align:top; border-top:1px solid black;border-bottom:1px solid black; border-right:1px solid black;"&gt;
&lt;p style="font-style:times new roman;font-size:10pt;text-align:center;"&gt;December 31, 2010&lt;/p&gt;
	&lt;/td&gt;
&lt;/tr&gt;
&lt;tr&gt;
	&lt;td style="vertical-align:top; border-right:1px solid black;"&gt;
&lt;p style="font-style:times new roman;font-size:10pt;text-align:left;"&gt;Inventory at FIFO&lt;/p&gt;
	&lt;/td&gt;
	&lt;td colspan="2" style="vertical-align:top; border-right:1px solid black;"&gt;
&lt;p style="font-style:times new roman;font-size:10pt;text-align:left;"&gt;&amp;#160;&lt;/p&gt;
	&lt;/td&gt;
	&lt;td colspan="2" style="vertical-align:top; border-right:1px solid black;"&gt;
&lt;p style="font-style:times new roman;font-size:10pt;text-align:left;"&gt;&amp;#160;&lt;/p&gt;
	&lt;/td&gt;
&lt;/tr&gt;
&lt;tr style="background-color:#c0c0c0;"&gt;
	&lt;td style="vertical-align:top; border-right:1px solid black;"&gt;
&lt;p style="font-style:times new roman;font-size:10pt;text-align:left; text-indent:25px;"&gt;Finished products&lt;/p&gt;
	&lt;/td&gt;
	&lt;td style="vertical-align:top;"&gt;
&lt;p style="font-style:times new roman;font-size:10pt;text-align:right; margin-right:20px;"&gt;$&lt;/p&gt;
	&lt;/td&gt;
&lt;td style="vertical-align:top; border-right:1px solid black;"&gt;&lt;p style="font-style:times new roman;font-size:10pt;text-align:right; margin-right:20px;"&gt;3,094&lt;/p&gt;&lt;/td&gt;
	&lt;td style="vertical-align:bottom;text-align:right;font-style:times new roman;font-size:10pt;"&gt;$&lt;/td&gt;&lt;td style="vertical-align:top; border-right:1px solid black;"&gt;
&lt;p style="font-style:times new roman;font-size:10pt;text-align:right; margin-right:20px;"&gt;5,833&lt;/p&gt;
	&lt;/td&gt;
&lt;/tr&gt;
&lt;tr&gt;
	&lt;td style="vertical-align:top; border-bottom:1px solid black; border-right:1px solid black;"&gt;
&lt;p style="font-style:times new roman;font-size:10pt;text-align:left; text-indent:25px;"&gt;Materials and work in process&lt;/p&gt;
	&lt;/td&gt;
	&lt;td colspan="2" style="vertical-align:top; border-bottom:1px solid black; border-right:1px solid black;"&gt;
&lt;p style="font-style:times new roman;font-size:10pt;text-align:right; margin-right:20px;"&gt;38,609&lt;/p&gt;
	&lt;/td&gt;
	&lt;td colspan="2" style="vertical-align:top; border-bottom:1px solid black; border-right:1px solid black;"&gt;
&lt;p style="font-style:times new roman;font-size:10pt;text-align:right; margin-right:20px;"&gt;42,987&lt;/p&gt;
	&lt;/td&gt;
&lt;/tr&gt;
&lt;tr style="background-color:#c0c0c0;"&gt;
	&lt;td style="vertical-align:top; border-right:1px solid black;"&gt;
&lt;p style="font-style:times new roman;font-size:10pt;text-align:left;"&gt;Gross inventories&lt;/p&gt;
	&lt;/td&gt;
	&lt;td colspan="2" style="vertical-align:top; border-right:1px solid black;"&gt;
&lt;p style="font-style:times new roman;font-size:10pt;text-align:right; margin-right:20px;"&gt;41,703&lt;/p&gt;
	&lt;/td&gt;
	&lt;td colspan="2" style="vertical-align:top; border-right:1px solid black;"&gt;
&lt;p style="font-style:times new roman;font-size:10pt;text-align:right; margin-right:20px;"&gt;48,820&lt;/p&gt;
	&lt;/td&gt;
&lt;/tr&gt;
&lt;tr&gt;
	&lt;td style="vertical-align:top; border-right:1px solid black;"&gt;
&lt;p style="font-style:times new roman;font-size:10pt;text-align:left; text-indent:25px;"&gt;Less: LIFO reserve&lt;/p&gt;
	&lt;/td&gt;
	&lt;td colspan="2" style="vertical-align:top; border-right:1px solid black;"&gt;
&lt;p style="font-style:times new roman;font-size:10pt;text-align:right; margin-right:20px;"&gt;(36,858)&lt;/p&gt;
	&lt;/td&gt;
	&lt;td colspan="2" style="vertical-align:top; border-right:1px solid black;"&gt;
&lt;p style="font-style:times new roman;font-size:10pt;text-align:right; margin-right:20px;"&gt;(37,448)&lt;/p&gt;
	&lt;/td&gt;
&lt;/tr&gt;
&lt;tr style="background-color:#c0c0c0;"&gt;
	&lt;td style="vertical-align:top; border-bottom:1px solid black; border-right:1px solid black;"&gt;
&lt;p style="font-style:times new roman;font-size:10pt;text-align:left; text-indent:25px;"&gt;Less: excess and obsolescence reserve&lt;/p&gt;
	&lt;/td&gt;
	&lt;td colspan="2" style="vertical-align:top; border-bottom:1px solid black; border-right:1px solid black;"&gt;
&lt;p style="font-style:times new roman;font-size:10pt;text-align:right; margin-right:20px;"&gt;(1,297)&lt;/p&gt;
	&lt;/td&gt;
	&lt;td colspan="2" style="vertical-align:top; border-bottom:1px solid black; border-right:1px solid black;"&gt;
&lt;p style="font-style:times new roman;font-size:10pt;text-align:right; margin-right:20px;"&gt;(1,545)&lt;/p&gt;
	&lt;/td&gt;
&lt;/tr&gt;
&lt;tr&gt;
	&lt;td style="vertical-align:top; border-bottom:2pt double black; border-right:1px solid black;"&gt;
&lt;p style="font-style:times new roman;font-size:10pt;text-align:left;"&gt;Net inventories&lt;/p&gt;
	&lt;/td&gt;
	&lt;td style="vertical-align:top; border-bottom:2pt double black;"&gt;
&lt;p style="font-style:times new roman;font-size:10pt;text-align:right; margin-right:20px;"&gt;$&lt;/p&gt;
	&lt;/td&gt;
&lt;td style="vertical-align:top; border-bottom:2pt double black; border-right:1px solid black;"&gt;&lt;p style="font-style:times new roman;font-size:10pt;text-align:right; margin-right:20px;"&gt;3,548&lt;/p&gt;&lt;/td&gt;
	&lt;td style="vertical-align:bottom;text-align:right;border-bottom:2pt double black;font-style:times new roman;font-size:10pt;"&gt;$&lt;/td&gt;&lt;td style="vertical-align:top; border-bottom:2pt double black; border-right:1px solid black;"&gt;
&lt;p style="font-style:times new roman;font-size:10pt;text-align:right; margin-right:20px;"&gt;9,827&lt;/p&gt;
&lt;/td&gt;
&lt;/tr&gt;
&lt;/table&gt;
</NonNumbericText><NonNumericTextHeader>NOTE 3 - INVENTORIES
Inventories are valued using the last-in, first-out (LIFO) method. An actual valuation of inventory under the LIFO method can be made only</NonNumericTextHeader><FootnoteIndexer /><CurrencyCode /><CurrencySymbol /><IsIndependantCurrency>false</IsIndependantCurrency><ShowCurrencySymbol>false</ShowCurrencySymbol><DisplayDateInUSFormat>false</DisplayDateInUSFormat><hasSegments>false</hasSegments><hasScenarios>false</hasScenarios></Cell></Cells><OriginalInstanceReportColumns /><Unit>Other</Unit><ElementDataType>us-types:textBlockItemType</ElementDataType><SimpleDataType>string</SimpleDataType><ElementDefenition>This element represents the complete disclosure related to inventory. This may include, but is not limited to, the basis of stating inventory, the method of determining inventory cost, the major classes of inventory, and the nature of the cost elements included in inventory. If inventory is stated above cost, accrued net losses on firm purchase commitments for inventory and losses resulting from valuing inventory at the lower-of-cost-or-market may also be included. For LIFO inventory, may disclose the amount and basis for determining the excess of replacement or current cost over stated LIFO value and the effects of a LIFO quantities liquidation that impacts net income.</ElementDefenition><ElementReferences>Reference 1: http://www.xbrl.org/2003/role/presentationRef
 -Publisher AICPA
 -Name Accounting Research Bulletin (ARB)
 -Number 43
 -Chapter 3
 -Section A
 -Paragraph 9

Reference 2: http://www.xbrl.org/2003/role/presentationRef
 -Publisher SEC
 -Name Regulation S-X (SX)
 -Number 210
 -Section 02
 -Paragraph 6
 -Subparagraph a, b, c
 -Article 5

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