SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q
(Mark One)

   X      Quarterly  report  pursuant  to Section 13 or 15(d) of the  Securities
          Exchange Act of 1934

For the quarterly period ended March 28, 1998 or

           Transition report pursuant to Section 13 or 15(d) of
          the Securities Exchange Act of 1934

For the transition period from            to           .

Commission file number 0-14938.

                         STANLEY FURNITURE COMPANY, INC.
                         -------------------------------
             (Exact name of registrant as specified in its charter)

            Delaware                                      54-1272589
(State or other jurisdiction of                        (I.R.S. Employer
 incorporation or organization)                       Identification No.)

            1641 Fairystone Park Highway, Stanleytown, Virginia 24168
               (Address of principal executive offices, Zip Code)


                                 (540) 627-2000
              (Registrant's telephone number, including area code)


                 (Former name, former address and former fiscal
                       year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.
                                              YES   X  NO

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock as of April 10, 1998.

          Class                                               Number
          -----                                               ------

Common Stock, par value $.02 per share                    3,440,757 Shares




<PAGE>
<TABLE>



                          PART I. FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                         STANLEY FURNITURE COMPANY, INC.
                                 BALANCE SHEETS
                        (In thousands, except share data)
<CAPTION>

                                                    (Unaudited)
                                                     March 28,     December 31,
ASSETS                                                  1998          1997
                                                    -----------   -------------
<S>                                                  <C>            <C>     
Current assets:
  Cash...........................................    $  1,717       $    756
  Accounts receivable, less allowances
    of $1,943 and $1,895.........................      31,295         27,427
  Inventories:
    Finished goods...............................      21,984         21,220
    Work-in-process..............................       7,124          6,997
    Raw materials................................      19,334         17,513
                                                     --------       --------
                                                       48,442         45,730
  Prepaid expenses and other current assets......         653          1,571
  Deferred income taxes..........................         770            770
                                                     --------       --------
    Total current assets.........................      82,877         76,254
                                                     --------       --------
Property, plant and equipment, at cost...........      85,557         84,545
  Less accumulated depreciation..................      34,138         32,831
                                                     --------       --------
                                                       51,419         51,714
Goodwill, less accumulated amortization of $3,108
  and $3,024.....................................      10,332         10,416
Other assets.....................................       4,729          4,841
                                                     --------       --------
                                                     $149,357       $143,225
                                                     ========       ========
LIABILITIES
Current liabilities:
  Current maturities of long-term debt...........    $  5,086       $  5,086
  Accounts payable...............................      19,040         18,164
  Accrued salaries, wages and benefits...........       9,673          9,687
  Other accrued expenses.........................       2,955          1,877
                                                     --------       --------
    Total current liabilities....................      36,754         34,814
Long-term debt, exclusive of current maturities..      48,303         47,491
Deferred income taxes............................      10,448         10,448
Other long-term liabilities......................       2,225          2,225
                                                     --------       --------
  Total liabilities..............................      97,730         94,978
                                                     --------       --------

STOCKHOLDERS' EQUITY
Common stock, $.02 par value, 10,000,000 shares
  authorized, 3,440,757 and 3,432,759 shares
  issued and outstanding.........................          68             68
Capital in excess of par value...................      37,618         37,508
Retained earnings................................      13,941         10,671
                                                     --------       --------
  Total stockholders' equity.....................      51,627         48,247
                                                     --------       --------
                                                     $149,357       $143,225
                                                     ========       ========
</TABLE>

                     The accompanying notes are an integral
                        part of the financial statements.





                                       2
<PAGE>
<TABLE>







                         STANLEY FURNITURE COMPANY, INC.
                              STATEMENTS OF INCOME
                                   (Unaudited)
                      (In thousands, except per share data)

<CAPTION>


                                                Three Months
                                                    Ended
                                           ---------------------
                                           March 28,    March 30,
                                             1998         1997
                                           --------    ---------
<S>                                        <C>         <C>     
Net sales............................      $ 57,691    $ 49,631

Cost of sales........................        43,546      37,170
                                           --------    --------

    Gross profit.....................        14,145      12,461

Selling, general and administrative
  expenses...........................         7,752       7,127
                                           --------    --------

  Operating income...................         6,393       5,334

Other expense, net...................            34          69
Interest expense.....................         1,084         756
                                           --------     -------

    Income before income taxes.......         5,275       4,509

Income taxes.........................         2,005       1,737
                                           --------     -------

   Net income........................      $  3,270     $ 2,772
                                           ========     =======

Earnings per share:

   Basic.............................           .95         .60
   Diluted...........................           .83         .55

Weighted average shares outstanding:

   Basic.............................         3,437       4,584
   Diluted...........................         3,949       5,011

</TABLE>





                     The accompanying notes are an integral
                        part of the financial statements.



                                       3


<PAGE>
<TABLE>





                         STANLEY FURNITURE COMPANY, INC.
                            STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                 (In thousands)
<CAPTION>
                                                       Three Months Ended
                                                     ----------------------
                                                     March 28,    March 30,
                                                        1998         1997
                                                     ---------    ---------
<S>                                                    <C>        <C>     
Cash flows from operating activities:
Cash received from customers.......................    $53,836    $ 46,323
Cash paid to suppliers and employees...............    (51,503)    (45,667)
Interest paid......................................     (1,183)     (1,038)
Income taxes paid, net.............................        (37)       (736)
                                                       -------    --------
  Net cash provided (used) by operating
    activities.....................................      1,113      (1,118)
                                                       -------    --------

Cash flows from investing activities:
Capital expenditures...............................     (1,012)       (270)
Purchase of other assets...........................        (24)        (65)
                                                       -------    --------
  Net cash used by investing activities............     (1,036)       (335)
                                                       -------    --------

Cash flows from financing activities:
Proceeds from revolving credit facility, net.......      5,098
Repayment of Senior Notes..........................     (4,286)
Proceeds from exercised stock options..............         72          75
                                                       -------    --------
  Net cash provided by financing activities........        884          75
                                                       -------    --------

Net increase (decrease) in cash....................        961      (1,378)
Cash at beginning of year..........................        756       8,126
                                                       -------    --------
Cash at end of quarter.............................    $ 1,717    $  6,748
                                                       =======    ========

Reconciliation of net income to net cash provided
 (used) by operating activities:

Net income.........................................    $ 3,270    $  2,772
Adjustments to reconcile net income to net
  cash provided (used) by operating activities:
    Depreciation and amortization..................      1,416       1,350
    Changes in assets and liabilities:
      Accounts receivable..........................     (3,868)     (3,268)
      Inventories..................................     (2,712)     (3,300)
      Prepaid expenses and other current
        assets, net................................        914           8
      Accounts payable.............................        876         984
      Accrued salaries, wages and benefits.........        (14)       (477)
      Other accrued expenses.......................      1,116         859
      Other assets.................................        115          97
      Other long-term liabilities..................                   (143)
                                                       -------    --------
Net cash provided (used) by operating activities...    $ 1,113    $ (1,118)
                                                       =======    ========

</TABLE>

                     The accompanying notes are an integral
                        part of the financial statements.

                                       4




<PAGE>



                         STANLEY FURNITURE COMPANY, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                 (In thousands)

1. Preparation of Interim Financial Statements

The financial  statements of Stanley  Furniture  Company,  Inc.  (referred to as
"Stanley" or the "Company")  have been prepared in accordance with the rules and
regulations of the Securities and Exchange Commission ("SEC"). In the opinion of
management,  these  statements  include  all  adjustments  necessary  for a fair
presentation of the results of all interim  periods  reported  herein.  All such
adjustments are of a normal recurring nature.  Certain  information and footnote
disclosures prepared in accordance with generally accepted accounting principles
have been either  condensed  or omitted  pursuant to SEC rules and  regulations.
However,  management  believes that the disclosures made are adequate for a fair
presentation  of results of operations and financial  position.  It is suggested
that  these  financial  statements  be read in  conjunction  with the  financial
statements and accompanying  notes included in Stanley's latest annual report on
Form 10-K.

2. Property, Plant and Equipment
                                      (Unaudited)
                                        March 28,    December 31,
                                          1998            1997
                                       ----------    ------------

     Land and buildings..............   $34,150         $33,941
     Machinery and equipment.........    49,057          48,180
     Office fixtures and equipment...     1,836           1,836
     Construction in progress........       514             588
                                        -------         -------
                                        $85,557         $84,545
                                        =======         =======

3. Long-Term Debt
                                      (Unaudited)
                                        March 28,    December 31,
                                          1998            1997
                                       ---------     ------------

     7.28% senior notes due March
       15, 2004......................   $25,714         $30,000
     7.57% senior note due June
       30, 2005......................     8,625           8,625
     7.43% senior notes due November
       18, 2007......................    10,000          10,000
     Revolving credit facility.......     9,050           3,952
                                        -------         -------
          Total                          53,389          52,577
     Less current maturities.........     5,086           5,086
                                        -------         -------
                                        $48,303         $47,491
                                        =======         =======







                                       5
<PAGE>



 4.  Earnings Per Common Share and Stock Split

Basic  earnings  per common  share are based upon the  weighted  average  shares
outstanding.  Outstanding  stock options are treated as common stock equivalents
for  purposes  of  computing  diluted  earnings  per  share  and  represent  the
difference between basic and diluted weighted average shares outstanding.

In April 1998, the Board of Directors  approved a two-for-one stock split, to be
effected in the form of a stock  dividend,  payable to stockholders of record on
May 1, 1998. In connection with the stock dividend,  approximately  $69,000 will
be transferred to common stock from capital in excess of par value in the second
quarter of 1998. The unaudited pro forma earnings per share,  giving retroactive
effect to the stock split were as follows:

                                           Three Months Ended
                                       --------------------------
                                        March 28,       March 30,
                                           1998            1997
                                       -----------      ---------

      Earnings per share:

            Basic....................     $ .48           $ .30
            Diluted..................     $ .41           $ .28

      Weighted average shares
        outstanding:

            Basic....................     6,874           9,168
            Diluted..................     7,898          10,022

ITEM 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations

Results of Operations

Net sales increased $8.1 million, or 16.2%, for the three month
period ended March 28, 1998, from the comparable 1997 period.  The
increase was due to higher unit volume.

Gross profit  margin for the three month period of 1998  decreased to 24.5% from
25.1% for the  comparable  1997 period.  The decrease  resulted  from higher raw
material  (primarily  lumber)  costs,  partially  offset by  improved  operating
efficiencies.

Selling,  general  and  administrative  expenses  as a  percentage  of net sales
decreased to 13.4% for the 1998 period from 14.4% in the comparable 1997 period.
The lower percentage was due principally to higher net sales in the 1998 period.
The  majority of the  $625,000  increase in 1998 was selling  expenses  directly
attributable to the sales increase.




                                       6
<PAGE>



As a result of the above,  operating income increased to $6.4 million,  or 11.1%
of net sales, from $5.3 million, or 10.7% in the comparable 1997 period.

Interest expense for the three month period ended March 28, 1998,  increased due
to higher  average debt levels  resulting  from the Company's  June and November
1997 repurchases of its common stock.

The  Company's  effective  income  tax rate was 38.0% for the 1998  three  month
period and total year 1997.

Financial Condition, Liquidity and Capital Resources

At March  28,  1998,  long-term  debt  including  current  maturities  was $53.4
million.  Debt service requirements are $800,000 in 1998, $14.2 million in 1999,
$5.2  million in 2000,  $6.7 million in 2001,  and $6.8  million in 2002.  As of
March 28,  1998,  approximately  $9.7  million  of  additional  borrowings  were
available under the Company's  revolving credit  facility.  The Company believes
that its financial  resources are adequate to support its capital needs and debt
service requirements.

The Company  generated  cash from  operations  of $1.1 million in the 1998 first
quarter  compared  to cash  used from  operations  of $1.1  million  in the 1997
period. Cash in the 1998 period was used to fund capital expenditures.  Cash was
required in the 1997 period to fund higher  payments to suppliers  and employees
due to increased production levels and higher tax payments.

Net cash  used by  investing  activities  was $1.0  million  in the 1998  period
compared  to  $335,000  in the  1997  period.  Expenditures  in each  year  were
primarily  for plant and  equipment  and other  assets in the  normal  course of
business.

Net cash  provided  by  financing  activities  was  $884,000  in the 1998 period
compared to $75,000 in the 1997 period. In the 1998 period, borrowings under the
revolving credit facility provided cash for senior debt payments.

Forward-Looking Statements

Certain  statements made in this report are not based on historical  facts,  but
are forward-looking statements. These statements can be identified by the use of
forward-looking  terminology  such  as  "believes,"  "expects,"  "may,"  "will,"
"should," or "anticipates"  or the negative thereof or other variations  thereon
or comparable  terminology,  or by  discussions  of strategy.  These  statements
reflect the Company's  reasonable judgment with respect to future events and are
subject to risks and uncertainties that could cause






                                       7
<PAGE>



actual  results  to  differ  materially  from  those  in  the  forward-  looking
statements.  Such risks and  uncertainties  include the  cyclical  nature of the
furniture  industry,  fluctuations  in the  price for  lumber  which is the most
significant  raw material  used by the  Company,  competition  in the  furniture
industry, capital costs and general economic conditions.



PART II. OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K

   (a) Exhibits

       Exhibit 10.1  Fourth  Amendment,  dated  February 24,  1998,  to the
                     Second Amended and Restated  Revolving  Credit Facility and
                     Term Loan  Agreement  dated  February  15, 1994 between the
                     Registrant, National Canada Finance Corp., and the National
                     Bank of Canada.*

       Exhibit 11.   Schedule of Computation of Earnings Per
                     Share.*

       Exhibit 27.   Financial Data Schedule.*

   (b) Reports on Form 8-K

       None.











* Filed herewith.




                                       8









<PAGE>








                                    SIGNATURE



     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
registrant has caused this report to be signed on its behalf by the  undersigned
thereunto duly authorized.

                                   STANLEY FURNITURE COMPANY, INC.


Date: April 14, 1998               By: /s/ Douglas I. Payne
                                       -------------------------
                                       Douglas I. Payne
                                       Sr. V.P. - Finance and
                                       Administration,
                                       Secretary and Treasurer
                                       (Principal Financial and
                                       Accounting Officer)




















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