----

----

**UNITED        STATES**

**SECURITIES        AND EXCHANGE COMMISSION**

**WASHINGTON,        D.C. 20549**

**Form        10-Q**

| **[X]** | **QUARTERLY                  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE                  ACT OF                  1934** |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------|

*For        the quarterly period ended *
***July        2, 2005***

| **[  ]** | **TRANSITION                  REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE                  ACT OF                  1934** |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------|

*for        the transition period from *
*          *
*         to *
*          *
*.*

**STANLEY        FURNITURE COMPANY, INC.**

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

**1641        Fairystone Park Highway, Stanleytown, Virginia 24168**

**(276)        627- 2000**

**Yes        **
**X        **
**No**

**Yes        **
**X        **
**No**

**July        15, 2005,**
**12,742,254**

----

**ITEM        1.**
**CONSOLIDATED        FINANCIAL STATEMENTS**

**STANLEY        FURNITURE COMPANY, INC.**

|                                                                                                                                                |   | **(unaudited)**              |        |                          |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------|-------------|-------------------------------|--------|
|                                                                                                                                                |   | **July                  2,** |        | December                  31, |   |
|                                                                                                                                                |   | **2005**                     |        | 2004                          |   |
| **ASSETS**                                                                                                                                          |   |                         |        |                          |   |
| Current                  assets:                                                                                                                    |   |                         |        |                          |   |   |   |
|     Cash                                                                                                                        |   | **$**                        | **13,586**  |                          | $      | 7,632 |   |
|     Accounts                  receivable, less allowances of $2,260 and $1,961                                                  |   |                         | **39,132**  |                          |   | 36,036 |   |
|     Inventories:                                                                                                                |   |                         |        |                          |   |   |   |
| Finished                  goods                                                                                                                     |   |                         | **53,660**  |                          |   | 52,646 |   |
| Work-in-process                                                                                                                                     |   |                         | **8,072**   |                          |   | 8,449 |   |
| Raw                  materials                                                                                                                      |   |                         | **10,551**  |                          |   | 12,563 |   |
|         Total                  inventories                                                                  |   |                         | **72,283**  |                          |   | 73,658 |   |
|                                                                                                                                                |   |                         |        |                          |   |   |   |
| Prepaid                  expenses and other current assets                                                                                          |   |                         | **1,745**   |                          |   | 1,585 |   |
| Deferred                  income taxes                                                                                                              |   |                         | **2,404**   |                          |   | 2,414 |   |
|         Total                  current assets                                                               |   |                         | **129,150** |                          |   | 121,325 |   |
|                                                                                                                                                |   |                         |        |                          |   |   |   |
| Property,                  plant and equipment, net                                                                                                 |   |                         | **51,290**  |                          |   | 51,342 |   |
| Goodwill                                                                                                                                            |   |                         | **9,072**   |                          |   | 9,072 |   |
| Other                  assets                                                                                                                       |   |                         | **6,560**   |                          |   | 7,149 |   |
|         Total                  assets                                                                       |   | **$**                        | **196,072** |                          | $      | 188,888 |   |
|                                                                                                                                                |   |                         |        |                          |   |   |   |
| **LIABILITIES**                                                                                                                                     |   |                         |        |                          |   |   |   |
| Current                  liabilities:                                                                                                               |   |                         |        |                          |   |   |   |
|     Current                  maturities of long-term debt                                                                       |   | **$**                        | **2,857**   |                          | $      | 4,257 |   |
|     Accounts                  payable                                                                                           |   |                         | **19,549**  |                          |   | 16,056 |   |
|     Accrued                  salaries, wages and benefits                                                                       |   |                         | **10,873**  |                          |   | 10,573 |   |
|     Other                  accrued expenses                                                                                     |   |                         | **2,063**   |                          |   | 1,872 |   |
|         Total                  current liabilities                                                          |   |                         | **35,342**  |                          |   | 32,758 |   |
|                                                                                                                                                |   |                         |        |                          |   |   |   |
| Long-term                  debt, exclusive of current maturities                                                                                    |   |                         | **10,000**  |                          |   | 11,428 |   |
| Deferred                  income taxes                                                                                                              |   |                         | **10,218**  |                          |   | 10,742 |   |
| Other                  long-term liabilities                                                                                                        |   |                         | **6,619**   |                          |   | 6,695 |   |
|         Total                  liabilities                                                                  |   |                         | **62,179**  |                          |   | 61,623 |   |
|                                                                                                                                                |   |                         |        |                          |   |   |   |
| **STOCKHOLDERS’                  EQUITY**                                                                                                     |   |                         |        |                          |   |   |   |
| Common                  stock, $.02 par value, 25,000,000 shares authorized12,742,254 and                  12,830,004 shares issued and outstanding |   |                         | **255**     |                          |   | 257 |   |
| Capital                  in excess of par value                                                                                                     |   |                         | **6,810**   |                          |   | 10,207 |   |
| Retained                  earnings                                                                                                                  |   |                         | **126,979** |                          |   | 116,952 |   |
| Accumulated                  other comprehensive loss                                                                                               |   |                         | **(151**    | **)**                         |   | (151 | ) |
|         Total                  stockholders’ equity                                                   |   |                         | **133,893** |                          |   | 127,265 |   |
|         Total                  liabilities and stockholders’ equity                                   |   | **$**                        | **196,072** |                          | $      | 188,888 |   |

----

**STANLEY        FURNITURE COMPANY, INC.**

|                                                                |   | Three                  Months |       | Six                  Months |   |
|---------------------------------------------------------------------|--------|-------------------------------|------------|-----------------------------|--------|
|                                                                |   | Ended                         |       | Ended                       |   |
|                                                                |   | **July                  2,**  |       | June                  26,   |   | **July                  2,** |   | June                  26, |   |
|                                                                |   | **2005**                      |       | 2004                        |   | **2005** |   | 2004 |   |
|                                                                |   |                          |       |                        |   |   |   |   |   |
| Net                  sales                                          |   | **$**                         | **83,635** |                        | $      | 72,223 |   | **$** | **166,585** |   | $ | 143,743 |   |
|                                                                |   |                          |       |                        |   |   |   |   |   |   |   |   |   |
| Cost                  of sales                                      |   |                          | **63,003** |                        |   | 53,977 |   |   | **125,488** |   |   | 108,276 |   |
|                                                                |   |                          |       |                        |   |   |   |   |   |   |   |   |   |
|     Gross                  profit               |   |                          | **20,632** |                        |   | 18,246 |   |   | **41,097** |   |   | 35,467 |   |
|                                                                |   |                          |       |                        |   |   |   |   |   |   |   |   |   |
| Selling,                  general and administrative expenses       |   |                          | **11,239** |                        |   | 9,539 |   |   | **22,290** |   |   | 18,956 |   |
|                                                                |   |                          |       |                        |   |   |   |   |   |   |   |   |   |
|     Operating                  income           |   |                          | **9,393**  |                        |   | 8,707 |   |   | **18,807** |   |   | 16,511 |   |
|                                                                |   |                          |       |                        |   |   |   |   |   |   |   |   |   |
| Other                  income, net                                  |   |                          | **54**     |                        |   | 42 |   |   | **119** |   |   | 95 |   |
| Interest                  income                                    |   |                          | **102**    |                        |   | 10 |   |   | **154** |   |   | 16 |   |
| Interest                  expense                                   |   |                          | **545**    |                        |   | 587 |   |   | **1,115** |   |   | 1,219 |   |
|                                                                |   |                          |       |                        |   |   |   |   |   |   |   |   |   |
|     Income                  before income taxes |   |                          | **9,004**  |                        |   | 8,172 |   |   | **17,965** |   |   | 15,403 |   |
|                                                                |   |                          |       |                        |   |   |   |   |   |   |   |   |   |
| Income                  taxes                                       |   |                          | **3,177**  |                        |   | 2,961 |   |   | **6,378** |   |   | 5,585 |   |
|                                                                |   |                          |       |                        |   |   |   |   |   |   |   |   |   |
|     Net                  Income                 |   | **$**                         | **5,827**  |                        | $      | 5,211 |   | **$** | **11,587** |   | $ | 9,818 |   |
|                                                                |   |                          |       |                        |   |   |   |   |   |   |   |   |   |
| Earnings                  per share:                                |   |                          |       |                        |   |   |   |   |   |   |   |   |   |
|                                                                |   |                          |       |                        |   |   |   |   |   |   |   |   |   |
|     Basic                                       |   | **$**                         | **.45**    |                        | $      | .42 |   | **$** | **.90** |   | $ | .79 |   |
|     Diluted                                     |   | **$**                         | **.44**    |                        | $      | .40 |   | **$** | **.87** |   | $ | .76 |   |
|                                                                |   |                          |       |                        |   |   |   |   |   |   |   |   |   |
| Weighted                  average shares outstanding:               |   |                          |       |                        |   |  |   |   |   |   |   |   |   |
|                                                                |   |                          |       |                        |   |   |   |   |   |   |   |   |   |
|     Basic                                       |   |                          | **12,905** |                        |   | 12,485 |   |   | **12,908** |   |   | 12,458 |   |
|     Diluted                                     |   |                          | **13,255** |                        |   | 13,031 |   |   | **13,316** |   |   | 12,970 |   |
|                                                                |   |                          |       |                        |   |   |   |   |   |   |   |   |   |
| Cash                  dividend declared per common share            |   | **$**                         | **.06**    |                        | $      | .05 |   | **$** | **.12** |   | $ | .10 |   |
|                                                                |   |                          |       |                        |   |   |   |   |   |   |   |   |   |

----

**STANLEY        FURNITURE COMPANY, INC.**

|                                                                                                                               |   | Six                  Months Ended |         |
|------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------|--------------|
|                                                                                                                               |   | **July                  2,**      |         | June                  26, |   |
|                                                                                                                               |   | **2005**                          |         | 2004 |   |
| **Cash                  flows from operating activities:**                                                                         |   |                              |         |   |   |   |   |
| Cash                  received from customers                                                                                      |   | **$**                             | **163,434**  |   | $ | 139,410 |   |
| Cash                  paid to suppliers and employees                                                                              |   |                              | **(138,696** | **)** |   | (128,046 | ) |
| Interest                  paid, net                                                                                                |   |                              | **(1,519**   | **)** |   | (715 | ) |
| Income                  taxes paid, net                                                                                            |   |                              | **(6,350**   | **)** |   | (4,067 | ) |
|     Net                  cash provided by operating activities                                                 |   |                              | **16,869**   |   |   | 6,582 |   |
|                                                                                                                               |   |                              |         |   |   |   |   |
| **Cash                  flows from investing activities:**                                                                         |   |                              |         |   |   |   |   |
| Capital                  expenditures                                                                                              |   |                              | **(2,721**   | **)** |   | (200 | ) |
| Purchase                  of other assets                                                                                          |   |                              | (**33**      | **)** |   | (88 | ) |
|     Net                  cash used by investing activities                                                     |   |                              | **(2,754**   | **)** |   | (288 | ) |
|                                                                                                                               |   |                              |         |   |   |   |   |
| **Cash                  flows from financing activities:**                                                                         |   |                              |         |   |   |   |   |
| Repayment                  of senior notes                                                                                         |   |                              | **(2,828**   | **)** |   | (4,286 | ) |
| Purchase                  and retirement of common stock                                                                           |   |                              | **(9,993**   | **)** |   |   |   |
| Proceeds                  from insurance policy loans                                                                              |   |                              | **1,110**    |   |   |   |   |
| Dividends                  paid                                                                                                    |   |                              | **(1,560**   | **)** |   | (1,246 | ) |
| Proceeds                  from exercised stock options                                                                             |   |                              | **5,110**    |   |   | 651 |   |
|     Net                  cash used by financing activities                                                     |   |                              | **(8,161**   | **)** |   | (4,881 | ) |
|                                                                                                                               |   |                              |         |   |   |   |   |
| Net                  increase in cash                                                                                              |   |                              | **5,954**    |   |   | 1,413 |   |
| Cash                  at beginning of period                                                                                       |   |                              | **7,632**    |   |   | 2,509 |   |
| **    Cash                  at                  end of period**                                                |   | **$**                             | **13,586**   |   | $ | 3,922 |   |
|                                                                                                                               |   |                              |         |   |   |   |   |
| **Reconciliation                  of net income to net cash provided by operating                  activities:**                   |   |                              |         |   |   |   |   |
| Net                  income                                                                                                        |   | **$**                             | **11,587**   |   | $ | 9,818 |   |
|     Depreciation                                                                                               |   |                              | **2,815**    |   |   | 2,830 |   |
|     Deferred                  income                  taxes                                                    |   |                              | **(514**     | **)** |   | (1,569 | ) |
|     Changes                  in assets and liabilities:                                                        |   |                              |         |   |   |   |   |
|         Accounts                  receivable                                               |   |                              | **(3,096**   | **)** |   | (4,603 | ) |
|         Inventories                                                                        |   |                              | **1,375**    |   |   | (13,802 | ) |
|         Prepaid                  expenses and other current assets                         |   |                              | **(323**     | **)** |   | 1,732 |   |
|         Accounts                  payable                                                  |   |                              | **3,493**    |   |   | 6,234 |   |
|         Accrued                  salaries, wages and benefits                              |   |                              | **544**      |   |   | 3,730 |   |
|         Other                  accrued expenses                                            |   |                              | **1,431**    |   |   | 689 |   |
|         Oher                  assets                                                       |   |                              | **(367**     | **)** |   | 491 |   |
|         Other                  long-term liabilities                                       |   |                              | **(76**      | **)** |   | 1,032 |   |
|             Net                  cash provided by operating activities |   | **$**                             | **16,869**   |   | $ | 6,582 |   |
|                                                                                                                               |   |                              |         |   |   |   |   |

----

**STANLEY        FURNITURE COMPANY, INC.**

| 1. | **Preparation                  of Interim Unaudited Consolidated Financial                  Statements** |
|----|----------------------------------------------------------------------------------------------------------|

| 2. | **Stock                  Compensation**  |
|----|-----------------------------------------------|

|                                                                                                                                                                                           |   | Three                  Months |                                                     | Six                  Months |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------|----------------------------------------------------------|-----------------------------|--------|
|                                                                                                                                                                                           |   | Ended                         |                                                     | Ended                       |   |
|                                                                                                                                                                                           |   | **July                  2,**  |                                                     | June                  26,   |   | **July                  2,** |   | June                  26, |   |
|                                                                                                                                                                                           |   |                          | **                       2005** |                        |   | 2004 |   |   | **2005** |   |   | 2004 |   |
| Net                  income as reported                                                                                                                                                        |   | **$**                         | **5,827**                                                |                        | $      | 5,211 |   | **$** | **11,587** |   | $ | 9,818 |   |
| Deduct:                  Total stock-based employee compensation expense determined under                  fair                  value based method for all awards, net of related tax effects |   |                          | **187**                                                  |                        |   | 432 |   |   | **476** |   |   | 825 |   |
|     Pro                  forma net income                                                                                                                                  |   | **$**                         | **5,640**                                                |                        | $      | 4,779 |   | **$** | **11,111** |   | $ | 8,993 |   |
|                                                                                                                                                                                           |   |                          |                                                     |                        |   |   |   |   |   |   |   |   |   |
| Earnings                  per share:                                                                                                                                                           |   |                          |                                                     |                        |   |   |   |   |   |   |   |   |   |
|     Basic                  -                  as reported                                                                                                                  |   | **$**                         | **0.45**                                                 |                        | $      | 0.42 |   | **$** | **.90** |   | $ | .79 |   |
|     Basic                  -                  pro forma                                                                                                                    |   | **$**                         | **0.44**                                                 |                        | $      | 0.38 |   | **$** | **.86** |   | $ | .72 |   |
|                                                                                                                                                                                           |   |                          |                                                     |                        |   |   |   |   |   |   |   |   |   |
|     Diluted                  - as reported                                                                                                                                 |   | **$**                         | **0.44**                                                 |                        | $      | 0.40 |   | **$** | **.87** |   | $ | .76 |   |
|     Diluted                  - pro forma                                                                                                                                   |   | **$**                         | **0.43**                                                 |                        | $      | 0.38 |   | **$** | **.84** |   | $ | .72 |   |

----

| 3. | **Property,                  Plant and Equipment** |
|----|----------------------------------------------------|

|                                                                                             |   | **July                  2,** |        | December                  31, |   |
|--------------------------------------------------------------------------------------------------|--------|------------------------------|-------------|-------------------------------|--------|
|                                                                                             |   |                         | **2005**    |                          |   | 2004 |   |
| Land                  and buildings                                                              |   | **$**                        | **38,823**  |                          | $      | 38,775 |   |
| Machinery                  and equipment                                                         |   |                         | **75,636**  |                          |   | 74,846 |   |
| Office                  furniture and equipment                                                  |   |                         | **4,160**   |                          |   | 2,386 |   |
|     Property,                  plant                  and equipment, at cost |   |                         | **118,619** |                          |   | 116,007 |   |
| Less                  accumulated depreciation                                                   |   |                         | **67,329**  |                          |   | 64,665 |   |
|     Property,                  plant                  and equipment, net     |   | **$**                        | **51,290**  |                          | $      | 51,342 |   |

| 4. |  **Debt** |
|----|----------------|

|                                                                                                      |   | **July                  2,** |       | December                  31, |   |
|-----------------------------------------------------------------------------------------------------------|--------|------------------------------|------------|-------------------------------|--------|
|                                                                                                      |   |                         | **2005**   |                          |   | 2004 |   |
| 7.57%                  senior note due through June 30, 2005                                              |   |                         |       |                          | $      | 1,400 |   |
| 7.43%                  senior notes due through November 18, 2007                                         |   | **$**                        | **4,286**  |                          |   | 4,285 |   |
| 6.94%                  senior notes due through May 3, 2011                                               |   |                         | **8,571**  |                          |   | 10,000 |   |
|     Total                                                                             |   |                         | **12,857** |                          |   | 15,685 |   |
| Less                  current maturities                                                                  |   |                         | **2,857**  |                          |   | 4,257 |   |
|     Long-term                  debt,                  exclusive of current maturities |   | **$**                        | **10,000** |                          | $      | 11,428 |   |

| 5. | **Employee                  Benefits Plans** |
|----|----------------------------------------------|

|                                                         |   | **Three                  Months** |     | **Six                  Months** |   |
|--------------------------------------------------------------|--------|-----------------------------------|----------|---------------------------------|--------|
|                                                         |   | **Ended**                         |     | **Ended**                       |   |
|                                                         |   | **July                  2,**      |     | June                  26,       |   | **July                  2,** |   | June                  26, |   |
|                                                         |   |                              | **2005** |                            |   | 2004 |   |   | **2005** |   |   | 2004 |   |
| Interest                  cost                               |   | **$**                             | **242**  |                            | $      | 244 |   | **$** | **485** |   | $ | 487 |   |
| Expected                  return on plan assets              |   |                              | **(257** | **)**                           |   | (242 | ) |   | **(513** | **)** |   | (484 | ) |
| Net                  amortization and deferral               |   |                              | **111**  |                            |   | 115 |   |   | **222** |   |   | 230 |   |
|      Net                  cost      |   |                              | **96**   |                            |   | 117 |   |   | **194** |   |   | 233 |   |
| Settlement                  expense                          |   |                              | **333**  |                            |   | 217 |   |   | **573** |   |   | 435 |   |
|      Total                  expense |   | **$**                             | **429**  |                            | $      | 334 |   | **$** | **767** |   | $ | 668 |   |

|                                                                              |   | Three                  Months             |     | Six                  Months            |   |
|-----------------------------------------------------------------------------------|--------|-------------------------------------------|----------|----------------------------------------|--------|
|                                                                              |   | Ended                                     |     | Ended                                  |   |
|                                                                              |   | **                    July 2,** |     |                     June 26, |   | **                    July 2,** |   |                     June 26, |   |
|                                                                              |   |                                      | **2005** |                                   |   | 2004 |   |   | **2005** |   |   | 2004 |   |
| Service                  Cost                                                     |   | **$**                                     | **22**   |                                   | $      | 17 |   | **$** | **44** |   | $ | 34 |   |
| Interest                  Cost                                                    |   |                                      | **46**   |                                   |   | 43 |   |   | **92** |   |   | 86 |   |
| Amortization                  of transitions obligation                           |   |                                      | **33**   |                                   |   | 33 |   |   | **66** |   |   | 66 |   |
| Amortization                  of net actuarial loss                               |   |                                      | **17**   |                                   |   | 10 |   |   | **34** |   |   | 20 |   |
|     Net                  periodic postretirement benefit cost |   | **$**                                     | **118**  |                                   | $      | 103 |   | **$** | **236** |   | $ | 206 |   |

----

| 6. | **Stockholders’                  Equity** |
|----|-------------------------------------------------|

|                                                                                                    |   | Three                  Months |                                                           | Six                  Months |   |
|---------------------------------------------------------------------------------------------------------|--------|-------------------------------|----------------------------------------------------------------|-----------------------------|--------|
|                                                                                                    |   | Ended                         |                                                           | Ended                       |   |
|                                                                                                    |   | **July                  2,**  |                                                           | June                  26,   |   | **July                  2,** |   | June                  26, |   |
|                                                                                                    |   |                          | **                        2005** |                        |   |                        2004 |   |   | **                        2005** |   |   |                         2004 |   |
| Weighted                  average shares outstanding for basic calculation                              |   |                          | **12,905**                                                     |                        |   | 12,485 |   |   | **12,908** |   |   | 12,458 |   |
| Add:                  Effect of dilutive stock options                                                  |   |                          | **350**                                                        |                        |   | 546 |   |   | **408** |   |   | 512 |   |
| Weighted                  average shares outstanding, Adjusted for diluted                  calculation |   |                          | **13,255**                                                     |                        |   | 13,031 |   |   | **13,316** |   |   | 12,970 |   |

|                                                      |   |   |    |                        |   |       |   | Accumulated   |        |
|-----------------------------------------------------------|--------|--------|---------|-----------------------------|--------|------------|--------|---------------|-------------|
|                                                      |   |   |    | Capital                  in |   |       |   | Other         |        |
|                                                      |   | Common |    | Excess                  of  |   | Retained   |   | Comprehensive |        |
|                                                      |   | Stock  |    | Par                  Value  |   | Earnings   |   | Loss          |        |
|                                                      |   |   |    |                        |   |       |   |          |        |   |   |   |   |
| Balance,                  December 31, 2004               |   | $      | 257     |                        | $      | 10,207     |   | $             | 116,952     |   | $ | (151 | ) |
|                                                      |   |   |    |                        |   |       |   |          |        |   |   |   |   |
| Net                  income                               |   |   |    |                        |   |       |   |          | **11,587**  |   |   |  |   |
| Exercise                  of stock options                |   |   | **4**   |                        |   | **5,106**  |   |          |        |   |   |   |   |
| Tax                  benefit on exercise of stock options |   |   |    |                        |   | **1,240**  |   |          |        |   |   |   |   |
| Stock                  repurchases                        |   |   | **(6**  | **)**                       |   | **(9,987** | **)**  |          |        |   |   |   |   |
| Stock                  awards                             |   |   |    |                        |   | **244**    |   |          |        |   |   |   |   |
| Cash                  dividends paid, $.12 per share      |   |   |    |                        |   |       |   |          | **(1,560**  | **)** |   |                                    |   |
| **Balance,                  July 2, 2005**                |   | **$**  | **255** |                        | **$**  | **6,810**  |   | **$**         | **126,979** |   | **$** | **(151** | **)** |

| 7. | **New                  Accounting Standards** |
|----|-----------------------------------------------|

----

| Item                  2. | **Management’s                  Discussion and Analysis of Financial Condition and Results of                  Operations** |
|--------------------------|-----------------------------------------------------------------------------------------------------------------------------------|

**Results        of Operations**

|                                                          |   | **Three                  Months** |      | Six                  Months |   |
|---------------------------------------------------------------|--------|-----------------------------------|-----------|-----------------------------|--------|
|                                                          |   | **Ended**                         |      | Ended                       |   |
|                                                          |   | **July                  2,**      |      | June                  26,   |   | **July                  2,** |   | June                  26, |   |
|                                                          |   |                              | **2005**  |                        |   | 2004 |   |   | **2005** |   |   | 2004 |   |
| Net                  sales                                    |   |                              | **100.0** | **%**                       |   | 100.0 | % |   | **100.0** | **%** |   | 100.0 | % |
| Cost                  of sales                                |   |                              | **75.3**  |                        |   | 74.7 |   |   | **75.3** |   |   | 75.3 |   |
| Gross                  profit                                 |   |                              | **24.7**  |                        |   | 25.3 |   |   | **24.7** |   |   | 24.7 |   |
| Selling,                  general and administrative expenses |   |                              | **13.4**  |                        |   | 13.2 |   |   | **13.4** |   |   | 13.2 |   |
| Operating                  income                             |   |                              | **11.2**  |                        |   | 12.1 |   |   | **11.3** |   |   | 11.5 |   |
| Other                  income, net                            |   |                              | **.1**    |                        |   |   |   |   | **.1** |   |   | .1 |   |
| Interest                  income                              |   |                              | **.1**    |                        |   |   |   |   | **.1** |   |   |   |   |
| Interest                  expense                             |   |                              | **.6**    |                        |   | .8 |   |   | **.7** |   |   | .9 |   |
| Income                  before income taxes                   |   |                              | **10.8**  |                        |   | 11.3 |   |   | **10.8** |   |   | 10.7 |   |
| Income                  taxes                                 |   |                              | **3.8**   |                        |   | 4.1 |   |   | **3.8** |   |   | 3.9 |   |
| Net                  income                                   |   |                              | **7.0**   | **%**                       |   | 7.2 | % |   | **7.0** | **%** |   | 6.8 | % |

----

**Financial        Condition, Liquidity and Capital Resources**

----

**Forward-Looking        Statements**

| **ITEM                  3.** | ** ****Quantitative                  and Qualitative Disclosures about Market                  Risk** |
|------------------------------|------------------------------------------------------------------------------------------------------------|

| **ITEM                  4.** | **Controls                  and Procedures** |
|------------------------------|----------------------------------------------|

| (a) | Evaluation                  of disclosure controls and procedures. Under the supervision and                  with the                  participation of our management, including our principal executive                  officer                  and principal financial officer, we conducted an evaluation of                  our                  disclosure controls and procedures, as such term is defined under                  Rule                  13a-15(e) promulgated under the Securities Exchange Act of 1934,                  as                  amended (the Exchange Act). Based on this evaluation, our principal                  executive officer and our principal financial officer concluded                  that our                  disclosure controls and procedures were effective as of the end                  of the                  period covered by this quarterly                  report. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b) | Changes                  in internal controls. There were no changes in our internal control                  over                  financial reporting that occurred during the second quarter that                  have                  materially affected, or are reasonably likely to materially affect,                  our                  internal control over financial                  reporting. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Item                  2. | Unregistered                  Sales of Equity Securities and Use of                  Proceeds |
|--------------------------|-----------------------------------------------------------------------------------------------|

|                                    |   |                       |    |                        |   |                                 |   | Maximum                  number (or    |    |
|-----------------------------------------|--------|----------------------------|---------|-----------------------------|--------|--------------------------------------|--------|----------------------------------------|---------|
|                                    |   |                       |    |                        |   | Total                  number of     |   | approximate                  dollar    |    |
|                                    |   | Total                      |    |                        |   | shares                  purchased    |   | value)                  of shares that |    |
|                                    |   | number                  of |    | Average                     |   | as                  part of publicly |   | may                  yet be purchased  |    |
|                                    |   | shares                     |    | price                  paid |   | announced                  plans     |   | under                  the plans or    |    |
| Period                                  |   | purchased                  |    | per                  share  |   | or                  programs         |   | programs                  (a)          |    |
|                                    |   |                       |    |                        |   |                                 |   |                                   |    |   |   |   |   |
| April                  3 to May 7, 2005 |   |                       | 26,006  |                        | $      | 21.28                                |   |                                   | 26,006  |   | $ | 17,700,000 |   |
| May                  8 to June 4, 2005  |   |                       | 325,892 |                        | $      | 20.42                                |   |                                   | 325,892 |   | $ | 11,100,000 |   |
| June                  5 to July 2, 2005 |   |                       | 44,500  |                        | $      | 20.63                                |   |                                   | 44,500  |   | $ | 10,200,000 |   |
|                                    |   |                       |    |                        |   |                                 |   |                                   |    |   |   |   |   |
| Total                                   |   |                       | 396,398 |                        | $      | 20.50                                |   |                                   | 396,398 |   |   |   |   |

| Item                  4. | Submission                  of Matters to a Vote of Security                  Holders |
|--------------------------|---------------------------------------------------------------------------------------|

| (a.) | The                  annual meeting of the Company’s stockholders was held on April 26,                  2005. |
|------|----------------------------------------------------------------------------------------------------------------------|

| (b.) | The                  stockholders of the Company elected two directors for a three-year                  term                  expiring at the annual meeting of stockholders to be held in 2008.                  The                  election was approved by the following                  vote: |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                      |   | For       |   | Withheld |
|-------------------------------------------|--------|-----------|--------|----------|
|                                      |   |      |   |     |
| Robert                  G. Culp, III      |   | 5,678,315 |   | 564,149  |
|                                      |   |      |   |     |
| T.                  Scott McIllhenny, Jr. |   | 5,643,970 |   | 598,494  |

| (c)                  (i) | The                  stockholders approved the amendment to the Company’s restated certificate                  of incorporation to increase the number of shares of common stock                  from                  10,000,000 to 25,000,000. The amendment was approved with the following                  vote: |
|--------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| For     | 5,226,901                                                   |
|---------|-------------------------------------------------------------|
| Against | 1,012,845                                                   |
| Abstain |                         2,718 |

|   | (ii) | The                  stockholders approved the amendment to the Company’s 2000 Incentive                  Compensation Plan to re-approve the performance criteria contained                  therein. The amendment was approved with the following                  vote: |
|--------|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| For                               | 5,146,767                                                   |
|-----------------------------------|-------------------------------------------------------------|
| Against                           |                     451,590                       |
| Abstain                           |                         5,176 |
| Broker                  Non Votes |    638,931                                   |

----

| Item                  6. | Exhibits                  and Reports on Form 8-K |
|--------------------------|---------------------------------------------------|

| (a) | Exhibits |
|-----|----------|

| 3.1    | The                  Restated Certificate of Incorporation of the Registrant as amended.                  (1)                                                                                                                                                                                                                                                      |   |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|   |                                                                                                                                                                                                                                                                                                                                                               |   |
| 3.2    | By-laws                  of the Registrant as amended (incorporated by reference to Exhibit                  3 to                  the Registrant’s Form 10-Q (Commission File No. 0-14938) for the quarter                  ended September 27, 2003).                                                                                                      |   |
|   |                                                                                                                                                                                                                                                                                                                                                               |   |
| 10.1   | Second                  amendment, dated June 15, 2005, to the revolving credit facility                  dated                  August 29, 2003, between the Registrant and Wachovia Bank. (incorporated                  by reference to Exhibit 10.1 to the Registrant’s Form 8-K (Commission File                  No. 0-14938) filed on June 16, 2005). |   |
|   |                                                                                                                                                                                                                                                                                                                                                               |   |
| 31.1   | Certification                  by Jeffrey R. Scheffer, our Chief Executive Officer, pursuant to                  18 U.S.C.                  Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley                  Act                  of 2002.(1)                                                                                               |   |
|   |                                                                                                                                                                                                                                                                                                                                                               |   |
| 31.2   | Certification                  by Douglas I. Payne, our Chief Financial Officer, pursuant to 18                  U.S.C.                  Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley                  Act                  of 2002. (1)                                                                                                 |   |
|   |                                                                                                                                                                                                                                                                                                                                                               |   |
| 32.1   | Certification                  of Jeffrey R. Scheffer, our Chief Executive Officer, pursuant to                  18 U. S.                  C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley                  Act of 2002. (1)                                                                                                             |   |
|   |                                                                                                                                                                                                                                                                                                                                                               |   |
| 32.2   | Certification                  of Douglas I. Payne, our Chief Financial Officer, pursuant to 18                  U. S. C.                  Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley                  Act                  of 2002. (1)                                                                                               |   |

| (b) | Reports                  on Form 8-K |
|-----|--------------------------------------|

----

| Date:                  July 19, 2005 |   | **STANLEY                  FURNITURE COMPANY, INC.**          |
|--------------------------------------|--------|---------------------------------------------------------------|
|                                 |   | By:                  /s/                  Douglas I. Payne    |
|                                 |   | Douglas                  I. Payne                             |
|                                 |   | V.P.                  - Finance & Administration and      |
|                                 |   | Secretary                                                     |
|                                 |   | (Principal                  Financial and Accounting Officer) |