<PAGE>
                       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 September 29, 1996 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.)

             Route 57, 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 October 15, 1996.

          Class                                      Number

Common Stock, par value $.02 per share          4,729,042 Shares


<PAGE>
                        PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS
                        STANLEY FURNITURE COMPANY, INC.
                                 BALANCE SHEETS
                       (In thousands, except share data)
<TABLE>                                                
                                        (Unaudited)     
                                        September 29,  December 31,
                                           1996            1995
<S>                                      <C>           <C>
ASSETS
Current assets:
  Cash................................   $  3,705      $    298
  Accounts receivable, less allowances of
    $1,961 and $1,157, respectively...     28,173        22,732
  Inventories:
    Finished goods....................     21,527        22,391
    Work-in-process...................      5,756         5,368
    Raw materials.....................     11,522        12,408   
                                           38,805        40,167
  Prepaid expenses and other current assets   415           435
  Deferred income taxes...............      2,615         2,420
      Total current assets............     73,713        66,052
Property, plant and equipment, at cost.    80,054        78,399
  Less accumulated depreciation........    26,946        24,168
                                           53,108        54,231
Goodwill, less accumulated amortization
  $2,604 and $2,352....................    10,836        11,088
Other assets...........................     3,975         3,180
                                         $141,632      $134,551   
LIABILITIES      
Current liabilities:
  Current maturities of long-term debt.  $    725      $    650
  Accounts payable.....................    14,176        13,637
  Accrued salaries, wages and benefits.     8,802         6,619
  Other accrued expenses...............     3,189         2,724
    Total current liabilities..........    26,892        23,630
Long-term debt, exclusive of current 
  maturities...........................    38,778        40,417
Deferred income taxes..................    12,650        12,180
Other long-term liabilities............     2,402         3,585
  Total liabilities....................    80,722        79,812
STOCKHOLDERS' EQUITY
Common stock, $.02 par value, 10,000,000 
  shares authorized, 4,729,042 shares         
  issued and outstanding...............        94            94
Capital in excess of par value.........    64,571        64,547
Deficit................................    (3,755)       (9,902)
  Total stockholders' equity...........    60,910        54,739
                                         $141,632      $134,551
</TABLE>
                  The accompanying notes are an integral part
                         of the financial statements.

<PAGE>
                        STANLEY FURNITURE COMPANY, INC.
                             STATEMENTS OF INCOME
                                  (Unaudited)
                     (In thousands, except per share data)
<TABLE>
                               Three Months           Nine Months
                                   Ended                  Ended   
                            September   October   September October
                            29, 1996    1, 1995   29, 1996  1, 1995

<S>                         <C>         <C>       <C>      <C> 
Net sales.................. $52,550     $44,706   $148,023 $127,858


Cost of sales..............  39,772      35,611    113,389  101,612


    Gross profit...........  12,778       9,095     34,634   26,246


Selling, general and
  administratie expenses...   7,619       6,347     21,973   19,402
                                                                  
Unusual items, net.........                                   (136)
    Operating income.......   5,159       2,748     12,661    6,980
                                                                  
Other expense, net.........      90         109        485      306
Interest expense...........     852       1,028      2,569    2,622
 
  Income from continuing operations
    before income taxes....   4,217       1,611      9,607    4,052
Income tax provision.......   1,602         613      3,706    1,541

  Income from continuing
    operations.............   2,615         998      5,901    2,511
      
Gain from discontinued  
  operations, net of taxes.     246                    246        
 
Net income................. $ 2,861     $   998   $  6,147  $ 2,511

Primary earnings per share:
  Continuing operations.... $   .53     $   .21   $   1.22  $   .53
  Discontinued operations..     .05                    .05        
 
     Net income............ $   .58     $   .21   $   1.27  $   .53

Weighted average number of 
  shares...................   4,954       4,728      4,848    4,728

Fully diluted earnings per share:
  Continuing operations.... $   .52     $   .21   $   1.17  $   .53
  Discontinued operations..     .05                    .05        
 
     Net income............ $   .57     $   .21   $   1.22  $   .53

Weighted average number of
  shares...................   5,051       4,728      5,052    4,728

</TABLE>
                  The accompanying notes are an integral part
                         of the financial statements.

<PAGE>

                        STANLEY FURNITURE COMPANY, INC.
                           STATEMENTS OF CASH FLOWS
                                  (Unaudited)
                                (In thousands)                    
<TABLE>            
                                         Nine Months Ended        
                                        September    October
                                        29, 1996     1, 1995 
<S>                                    <C>         <C>
Cash flows from operating activities:
Cash received from customers.........  $141,887    $126,394
Cash paid to suppliers and employees.  (127,917)   (122,447)
Interest paid........................    (3,169)     (3,019)
Income taxes paid, net...............    (3,409)       (932)
  Net cash provided (used) by 
    operating activities.............     7,392          (4)
  
Cash flows from investing activities:   
Capital expenditures.................    (2,706)    (12,932)
Purchase of other assets.............      (181)       (399)
Proceeds from sale of assets.........        12          25   
  Net cash used by investing 
    activities.......................    (2,875)    (13,306)
                                                            
Cash flows from financing activities:                       
Issuance of senior notes.............                10,000
(Repayment of) proceeds from revolving
  credit facility, net...............      (914)      2,897   
Repayment of senior note.............      (650)               
Proceeds from insurance policy loans.       430         385
Proceeds from exercise of stock 
  options............................        24             
  Net cash (used) provided by financing          
    activities.......................    (1,110)     13,282

Net increase (decrease) in cash......     3,407         (28)
Cash at beginning of year............       298         301
Cash at end of quarter...............  $  3,705    $    273

Supplemental cash flow information:
Net income...........................  $  6,147    $  2,511
Adjustments to reconcile net income to
  net cash provided (used) by operating activities:
    Depreciation and amortization....     3,865       3,529
    Loss on sale of assets...........       265          44
    Other............................      (246)        (30)
    Changes in assets and liabilities:
      Accounts receivable............    (5,441)     (1,501)
      Inventories....................     1,362      (1,778)
      Prepaid expenses and other 
        current assets...............    (1,101)       (265)
      Accounts payable...............       539      (3,196)
      Accrued salaries, wages and
        benefits.....................     2,183       1,458
      Other accrued expenses.........        41         356
      Deferred income taxes..........       114        (193)
      Other assets...................       (69)        (54)
      Other long-term liabilities....      (267)       (885)
Net cash provided (used) by operating
  activities.........................  $  7,392    $     (4)
</TABLE>
                 The accompanying notes are an integral part 
                         of the financial statements.

<PAGE>
                        STANLEY FURNITURE COMPANY, INC.
                         NOTES TO FINANCIAL STATEMENTS
                                  (Unaudited)

 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)
                                       September 29,   December 31,
                                            1996          1995   
                                             (In thousands)
<TABLE>

<S>                                       <C>           <C>
      Land and buildings.............     $33,643       $33,594
      Machinery and equipment........      44,424        43,127
      Leasehold improvements.........         153           153
      Furniture, fixtures and office
        equipment....................       1,382         1,387
      Construction in progress.......         452           138
                                          $80,054       $78,399

 3.   Long-Term Debt                               
                                        (Unaudited)             
                                       September 29,  December 31,
                                            1996          1995   
                                             (In thousands)

      7.28% senior notes due March
        15, 2004.....................     $30,000       $30,000
      7.57% senior note due June 30,
        2005.........................       9,350        10,000
      Revolving credit facility......                       914
      7% convertible subordinated
        debentures due April 1, 2012.         153           153
          Total                            39,503        41,067
          
      Less current maturities........         725           650
                                          $38,778       $40,417
</TABLE>
<PAGE> 
                        STANLEY FURNITURE COMPANY, INC.
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                (In thousands, except share and per share data)



4.  Discontinued Operations

On July 1, 1996, the Company was released from a lease obligation
resulting from the purchase and concurrent resale of certain
facilities at its former Norman's of Salisbury division.  This
obligation was accrued as part of the 1994 charge to discontinued
operations in connection with the liquidation of Norman's. 
Accordingly, in the third quarter of 1996, the Company recorded an
after tax gain of $246,000, or $.05 per share, as a partial
reversal of this accrual.

5.  New Accounting Standard

In October 1995, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 123, "Accounting
for Stock-Based Compensation" ("SFAS 123").  SFAS 123 requires a
fair value based method of accounting for stock based compensation,
and provides an option to the Company to either recognize
compensation expense for employee stock based compensation or to
provide proforma earnings information as if such compensation cost
had been recognized.  The Company has not determined which election
it will make under SFAS 123, nor the various assumptions that will
be used in the fair value calculations.  Under either method the
effect on net income for the nine-month period ended September 29,
1996 is not material, since options to purchase only 7,500 shares
were granted during the period.


6.  Subsequent Event

On October 15, 1996, the Company filed a registration statement
with the SEC for a public offering of its common stock held by a
major stockholder.  In connection with this offering, the Company
has agreed to acquire from the selling stockholders any share of
common stock not acquired at the price offered to the public, net
of an amount equal to the underwriting discount that otherwise
would have been paid in respect of such shares of common stock. 
Assuming an offering price of $19.25 and an underwriting discount
of 5.5%,
and that the Underwriters' overallotment option is not exercised,
the Company
will acquire 358,902 shares of common stock from the selling
stockholders for
an aggregate consideration of $6,528,876, which the Company will
fund from
available cash and, if necessary, borrowings under its revolving
credit
facility.  The following pro forma information assumes that the
repurchase of
common stock is financed entirely by borrowings under the revolving
credit
facility at an assumed interest rate of 7%.  The pro forma effects
on the
Company's financial position assume that the stock was repurchased
as of
September 29, 1996.  The pro forma effects on the Company's
operating results
for the year ended December 31, 1995 and the nine-months ended
September 29,
1996 assume that the stock was repurchased at the beginning of the
respective
twelve- and nine-month periods.

                                          As Reported     Pro Forma
                                          (In thousands, except per
                                                 share data)
<TABLE>
<S>                                         <C>            <C>
Financial position at September 29, 1996:
  Long-term debt including current 
    maturities...........................   $39,503        $46,032
  Stockholders' equity...................    60,910         54,381
Operating results, year ended December 
  31, 1995:
  Interest expense.......................     3,534          3,991
  Net income.............................     3,889          3,608
  Income from continuing operations per
    common share - primary...............   $   .82        $   .83
  Income from continuing operations per
    common share - fully diluted.........   $   .82        $   .83
Operating results, nine months ended
  September 29, 1996:
  Interest expense.......................     2,569          2,912
  Net income.............................     6,147          5,937
  Income from continuing operations per
    common share - primary...............   $  1.22        $  1.27
  Income from continuing operations per
    common share - fully diluted.........   $  1.17        $  1.21
</TABLE>

The pro forma information does not include offering expenses of
approximately $300,000 payable by the Company, which will be
incurred in the fourth quarter of 1996.
        

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

Results of Operations

Net sales increased $7.8 million, or 17.5%, for the three-month
period ended September 29, 1996 from the comparable 1995 period. 
For the nine-month period, net sales increased $20.2 million, or
15.8%, from the comparable 1995 period.  The increases were due
principally to higher unit volume and to a lesser extent higher
average selling prices.

Gross profit margin for the three- and nine-month periods of 1996
increased to 24.3% and 23.4%, respectively, from 20.3% and 20.5%
for the comparable 1995 periods.  The higher gross profit margin
was due primarily to stabilizing raw material costs, improved
operating efficiencies and the leveraging of fixed costs due to
increased production levels.

Selling, general and administrative expenses increased for the 1996
periods due to (i) higher selling cost resulting from increased
sales and increased merchandising expenses, (ii) increased 
compensation expense pursuant to the Company's incentive
compensation plan for key employees, and (iii) increased provision
for bad debts.  For the three-month period, these expenses as a
percentage of net sales increased to 14.5% from 14.2% for the
comparable 1995 period.  For the nine-month period, these expenses
as a percentage of net sales decreased to 14.8% from 15.2% for the
comparable 1995 period, due principally to higher net sales. 

During the second quarter of 1995, the Company recognized an
unusual item consisting of the net effect of, (i) an accrual
reversal as a result of being released from a lease obligation at
its previously closed Waynesboro, Virginia facility and (ii) a
charge for severance resulting from the resignation of the
Company's former chief operating officer.

As a result of the above, operating income for the three- and nine-
month periods of 1996 increased to $5.2 million, or 9.8% of net
sales, and $12.7 million, or 8.6% of net sales, respectively, from
$2.7 million, or 6.1% of net sales, and $7.0 million, or 5.5% of
net sales, for the comparable 1995 periods.

Interest expense for both the three- and nine-month periods of 1996
decreased due to lower debt levels.

The Company's effective income tax rate was 38.6% and 38.0% for the
nine-month periods of 1996 and 1995, respectively.

<PAGE>
Financial Condition, Liquidity and Capital Resources

At September 29, 1996, long-term debt was $38.8 million, and
approximately $23.0 million of additional borrowing capacity was
available under the revolving credit facility.  Annual debt service
requirements are $878,000 in 1997, $5.1 million in both 1998 and
1999 and $5.2 million in both 2000 and 2001.  The Company expects
capital expenditures for the next twelve months to range from $4
million to $5 million. 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 $7.4 million in the
1996 nine-month period principally as a result of higher sales. 
The Company used $4.0 million of the cash generated in the 1996
nine-month period primarily to fund capital expenditures and reduce
borrowings.  Cash provided from the Company's operations during the
1995 nine-month period was used substantially to fund its operating
activities for that period.  For the 1995 nine-month period,
compared to the prior year period, cash was required for higher
interest payments offet by lower tax payments and less cash paid to
suppliers and employees due to reduced inventory levels.

Net cash used by investing activities was $2.9 million in the 1996
nine-month period compared to $13.3 million in the 1995 nine-month
period.  In the 1995 nine-month period, proceeds from the issuance
of senior notes and additional borrowings from the revolving credit
facility were used to purchase two previously leased plant
facilities for $10.5 million.  The 1996 expenditures and the
remaining expenditures for 1995 were primarily for plant and
equipment and other assets in the normal course of business.

Net cash used by financing activities was $1.1 million in the 1996
nine-month period compared to cash provided by financing activities
of $13.3 million in the 1995 nine-month period.  The 1995
borrowings provided cash for the purchase of the two previously
leased plant facilities and other capital expenditures.


Discontinued Operations

On July 1, 1996, the Company was released from a lease obligation
resulting from the purchase and concurrent resale of certain
facilities at its former Norman's of Salisbury division.  This
obligation was accrued as part of the 1994 charge to discontinued
operations in connection with the liquidation of Norman's. 
Accordingly, in the third quarter, the Company recorded an after
tax gain of $246,000, or $.05 per share, as a partial reversal of
this accrual.





<PAGE>
New Accounting Standard

In October 1995, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 123, "Accounting
for Stock-Based Compensation" ("SFAS 123").  SFAS 123 requires a
fair value based method of accounting for stock based compensation,
and provides an option to the Company either to recognize
compensation expense for employee stock based compensation or to
provide pro forma earnings information as if such compensation cost
had been recognized.  The Company has not determined which election
it will make under SFAS 123, nor the various assumptions that will
be used in the fair value calculations.  Under either method the
effect on net income for the nine-month period ended September 29,
1996 is not material, since options to purchase only 7,500 shares
were granted during the period.

                                               <PAGE>
<PAGE>
PART II.  OTHER INFORMATION


Item 6.  Exhibits and Reports on Form 8-K

         (a)  Exhibits

         Exhibit 4.1   Letter Amendment dated October 14, 1996    
                       to Note Agreements dated February 15,      
                       1994 and June 29, 1995 between the         
                       Company and The Prudential Insurance       
                       Company of America.*

         Exhibit 10.1  Assignment and Transfer Agreement dated    
                       as of October 8, 1996 between National     
                       Canada Finance Corp., a Delaware           
                       corporation ("NCFC") and National Bank     
                       of Canada, a Canadian chartered bank       
                       ("NBC") relating to the Second Amended     
                       and Restated Revolving Credit Facility     
                       dated as of February 15, 1995 (the         
                       "Second Amended and Restated Revolving     
                       Credit Facility") among the Company,       
                       NCFC and NBC.*

         Exhibit 10.2  Second Amendment dated as of October 14,   
                       1996 between the Company and National      
                       Bank of Canada to Second Amended and       
                       Restated Revolving Credit Facility.*

         Exhibit 10.3  Amendment No. 1, dated as of November 1,   
                       1996, between the Company and the Thomas   
                       H. Lee Company to the Management           
                       Agreement dated September 29, 1988 among   
                       the Company's predecessors and the         
                       Thomas H. Lee Company.*

         Exhibit 10.4  Amendment No. 1 dated as of October 1,     
                       1996 to Employment Agreement dated as of   
                       January 1, 1991 between the Company and    
                       Albert L. Prillaman.*
         
         Exhibit 11.   Schedule of Computation of Earnings Per    
                       Share.*

         Exhibit 27.   Financial Data Schedule.*
     
         (b)  Reports on Form 8-K

         None.
           
* Filed herewith.         <PAGE>
<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: November 7, 1996            By: /s/ Douglas I. Payne        
                                      Douglas I. Payne 
                                      Vice President of Finance,
                                      Secretary and Treasurer
                                      (Principal Financial and 
                                      Accounting Officer)