----

----

**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 *
***October      1, 2005***

*or*

| **[                ]** | **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**

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

**October      1,      2005,**
**12,834,160      **

----

----

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

**STANLEY      FURNITURE COMPANY, INC.**

|                                                                                                                                                           |   | **(unaudited)**                |        |                              |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------|-------------|-----------------------------------|--------|
|                                                                                                                                                           |   | **October                1, ** |        |  December                31, |   |
|                                                                                                                                                           |   | **2005 **                      |        |  2004                        |   |
| **ASSETS**                                                                                                                                                     |   |                                |        |                              |   |
| Current                assets:                                                                                                                                 |   |                                |        |                              |   |
| Cash                                                                                                                                                           |   | **$**                               | **19,313**  |                              | $      | 7,632 |   |
| Accounts                receivable, less allowances of $2,308 and $1,961                                                                                       |   |                                | **41,098**  |                              |   | 36,036 |   |
| Inventories:                                                                                                                                                   |   |                                |        |                              |   |   |   |
| Finished                goods                                                                                                                                  |   |                                | **53,102**  |                              |   | 52,646 |   |
| Work-in-process                                                                                                                                                |   |                                | **9,025**   |                              |   | 8,449 |   |
| Raw                materials                                                                                                                                   |   |                                | **10,649**  |                              |   | 12,563 |   |
| Total                inventories                                                                                                                               |   |                                | **72,776**  |                              |   | 73,658 |   |
|                                                                                                                                                           |   |                                |        |                              |   |   |   |
| Prepaid                expenses and other current assets                                                                                                  |   |                                | **1,007**   |                              |   | 1,585 |   |
| Deferred                income taxes                                                                                                                           |   |                                | **2,521**   |                              |   | 2,414 |   |
| Total                current                assets                                                                                                             |   |                                | **136,715** |                              |   | 121,325 |   |
|                                                                                                                                                           |   |                                |        |                              |   |   |   |
| Property,                plant and equipment, net                                                                                                              |   |                                | **50,970**  |                              |   | 51,342 |   |
| Goodwill                                                                                                                                                       |   |                                | **9,072**   |                              |   | 9,072 |   |
| Other                assets                                                                                                                                    |   |                                | **7,726**   |                              |   | 7,149 |   |
| Total                assets                                                                                                                                    |   | **$**                               | **204,483** |                              | $      | 188,888 |   |
|                                                                                                                                                           |   |                                |        |                              |   |   |   |
| **LIABILITIES**                                                                                                                                                |   |                                |        |                              |   |   |   |
| Current                liabilities:                                                                                                                            |   |                                |        |                              |   |   |   |
| Current                maturities of long-term debt                                                                                                            |   | **$**                               | **2,857**   |                              | $      | 4,257 |   |
| Accounts                payable                                                                                                                                |   |                                | **18,963**  |                              |   | 16,056 |   |
| Accrued                salaries, wages and benefits                                                                                                            |   |                                | **12,630**  |                              |   | 10,573 |   |
| Other                accrued                expenses                                                                                                           |   |                                | **2,478**   |                              |   | 1,872 |   |
| Total                current                liabilities                                                                                                        |   |                                | **36,928**  |                              |   | 32,758 |   |
|                                                                                                                                                           |   |                                |        |                              |   |   |   |
| Long-term                debt, exclusive of current maturities                                                                                                 |   |                                | **10,000**  |                              |   | 11,428 |   |
| Deferred                income taxes                                                                                                                           |   |                                | **10,325**  |                              |   | 10,742 |   |
| Other                long-term liabilities                                                                                                                     |   |                                | **6,580**   |                              |   | 6,695 |   |
| Total                liabilities                                                                                                                               |   |                                | **63,833**  |                              |   | 61,623 |   |
|                                                                                                                                                           |   |                                |        |                              |   |   |   |
| **STOCKHOLDERS’                EQUITY**                                                                                                                  |   |                                |        |                              |   |   |   |
| Common                stock,                $.02 par value, 25,000,000 shares authorized12,834,160                and 12,830,004 shares issued and outstanding |   |                                | **257**     |                              |   | 257 |   |
| Capital                in                excess of par value                                                                                                   |   |                                | **8,533**   |                              |   | 10,207 |   |
| Retained                earnings                                                                                                                               |   |                                | **132,011** |                              |   | 116,952 |   |
| Accumulated                other comprehensive loss                                                                                                            |   |                                | **(151**    | )                                 |   | (151 | ) |
| Total                stockholders’ equity                                                                                                                |   |                                | **140,650** |                              |   | 127,265 |   |
| Total                liabilities and stockholders’ equity                                                                                                |   | **$**                               | **204,483** |                              | $      | 188,888 |   |

----

**STANLEY      FURNITURE COMPANY, INC.**

|                                                                  |   | Three                Months                                                                                                                         |       | Nine                Months                                                                       |   |
|-----------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------|------------|--------------------------------------------------------------------------------------------------|--------|
|                                                                  |   |                                     Ended  |       |                        Ended                             |   |
|                                                                  |   | **                    October** September                                                                                  |       | **                       October**   September |   |
|                                                                  |   | **1,                2005**                                                                                                                |       |          25,                2004               |   | **1,                2005**  |   |                       25, 2004  |   |
|                                                                  |   |                                                                                                                                                |       |                                                                                             |   |   |   |   |   |
| Net                sales                                              |   | **$**                                                                                                                                               | **85,615** |                                                                                             | $      | 78,803 |   | **$** | **252,200** |   | $ | 222,546 |   |
|                                                                  |   |                                                                                                                                                |       |                                                                                             |   |   |   |   |   |   |   |   |   |
| Cost                of                sales                           |   |                                                                                                                                                | **65,131** |                                                                                             |   | 59,389 |   |   | **190,619** |   |   | 167,665 |   |
|                                                                  |   |                                                                                                                                                |       |                                                                                             |   |   |   |   |   |   |   |   |   |
| Gross                profit                                           |   |                                                                                                                                                | **20,484** |                                                                                             |   | 19,414 |   |   | **61,581** |   |   | 54,881 |   |
|                                                                  |   |                                                                                                                                                |       |                                                                                             |   |   |   |   |   |   |   |   |   |
| Selling,                general and administrative expenses           |   |                                                                                                                                                | **11,106** |                                                                                             |   | 10,636 |   |   | **33,396** |   |   | 29,592 |   |
|                                                                  |   |                                                                                                                                                |       |                                                                                             |   |   |   |   |   |   |   |   |   |
| Operating                income                                       |   |                                                                                                                                                | **9,378**  |                                                                                             |   | 8,778 |   |   | **28,185** |   |   | 25,289 |   |
|                                                                  |   |                                                                                                                                                |       |                                                                                             |   |   |   |   |   |   |   |   |   |
| Other                income,                net                       |   |                                                                                                                                                | **71**     |                                                                                             |   | 50 |   |   | **190** |   |   | 145 |   |
| Interest                income                                        |   |                                                                                                                                                | **96**     |                                                                                             |   | 4 |   |   | **250** |   |   | 21 |   |
| Interest                expense                                       |   |                                                                                                                                                | **548**    |                                                                                             |   | 588 |   |   | **1,663** |   |   | 1,808 |   |
|                                                                  |   |                                                                                                                                                |       |                                                                                             |   |   |   |   |   |   |   |   |   |
| Income                before                income taxes              |   |                                                                                                                                                | **8,997**  |                                                                                             |   | 8,244 |   |   | **26,962** |   |   | 23,647 |   |
|                                                                  |   |                                                                                                                                                |       |                                                                                             |   |   |   |   |   |   |   |   |   |
| Income                taxes                                           |   |                                                                                                                                                | **3,195**  |                                                                                             |   | 2,959 |   |   | **9,573** |   |   | 8,544 |   |
|                                                                  |   |                                                                                                                                                |       |                                                                                             |   |   |   |   |   |   |   |   |   |
| Net                income                                             |   | **$**                                                                                                                                               | **5,802**  |                                                                                             | $      | 5,285 |   | **$** | **17,389** |   | $ | 15,103 |   |
|                                                                  |   |                                                                                                                                                |       |                                                                                             |   |   |   |   |   |   |   |   |   |
| Earnings                per                share:                     |   |                                                                                                                                                |       |                                                                                             |   |   |   |   |   |   |   |   |   |
|                                                                  |   |                                                                                                                                                |       |                                                                                             |   |   |   |   |   |   |   |   |   |
| Basic                                                                 |   | **$**                                                                                                                                               | **.45**    |                                                                                             | $      | .42 |   | **$** | **1.35** |   | $ | 1.21 |   |
| Diluted                                                               |   | **$**                                                                                                                                               | **.44**    |                                                                                             | $      | .40 |   | **$** | **1.31** |   | $ | 1.16 |   |
|                                                                  |   |                                                                                                                                                |       |                                                                                             |   |   |   |   |   |   |   |   |   |
| Weighted                average shares outstanding:                   |   |                                                                                                                                                |       |                                                                                             |   |  |   |   |   |   |   |   |   |
|                                                                  |   |                                                                                                                                                |       |                                                                                             |   |   |   |   |   |   |   |   |   |
| Basic                                                                 |   |                                                                                                                                                | **12,811** |                                                                                             |   | 12,569 |   |   | **12,886** |   |   | 12,499 |   |
| Diluted                                                               |   |                                                                                                                                                | **13,198** |                                                                                             |   | 13,100 |   |   | **13,294** |   |   | 13,019 |   |
|                                                                  |   |                                                                                                                                                |       |                                                                                             |   |   |   |   |   |   |   |   |   |
| Cash                dividend                declared per common share |   | **$**                                                                                                                                               | **.06**    |                                                                                             | $      | .05 |   | **$** | **.18** |   | $ | .15 |   |
|                                                                  |   |                                                                                                                                                |       |                                                                                             |   |   |   |   |   |   |   |   |   |

----

**STANLEY        FURNITURE COMPANY, INC.**

|                                                                                                             |   | Nine                  Months                  Ended |         |
|------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------|--------------|
|                                                                                                             |   | **October**                                         |         | September |   |
|                                                                                                             |   | **1,                  2005**                        |         | 25,                  2004 |   |
| **Cash                  flows from operating activities:**                                                       |   |                                                |         |   |   |
| Cash                  received                  from customers                                                   |   | **$**                                               | **247,093**  |   | $ | 212,934 |   |
| Cash                  paid to                  suppliers and employees                                           |   |                                                | **(214,001** | **)** |   | (198,687 | ) |
| Interest                  paid, net                                                                              |   |                                                | **(1,431**   | **)** |   | (1,791 | ) |
| Income                  taxes                  paid, net                                                         |   |                                                | **(8,447**   | **)** |   | (7,748 | ) |
| Net                  cash                  provided by operating activities                                      |   |                                                | **23,214**   |   |   | 4,708 |   |
|                                                                                                             |   |                                                |         |   |   |   |   |
| **Cash                  flows from investing activities:**                                                       |   |                                                |         |   |   |   |   |
| Capital                  expenditures                                                                            |   |                                                | **(3,791**   | **)** |   | (402 | ) |
| Purchase                  of                  other assets                                                       |   |                                                | **(33**      | **)** |   | (119 | ) |
| Net                  cash used                  by investing activities                                          |   |                                                | **(3,824**   | **)** |   | (521 | ) |
|                                                                                                             |   |                                                |         |   |   |   |   |
| **Cash                  flows from financing activities:**                                                       |   |                                                |         |   |   |   |   |
| Repayment                  of                  senior notes                                                      |   |                                                | **(2,828**   | **)** |   | (5,586 | ) |
| Purchase                  and                  retirement of common stock                                        |   |                                                | **(9,996**   | **)** |   |   |   |
| Proceeds                  from                  insurance policy loans                                           |   |                                                | **1,110**    |   |   | 993  |   |
| Dividends                  paid                                                                                  |   |                                                | **(2,330**   | **)** |   | (1,876 | ) |
| Proceeds                  from                  exercised stock options                                          |   |                                                | **6,335**    |   |   | 1,944 |   |
| Net                  cash used                  by financing activities                                          |   |                                                | **(7,709**   | **)** |   | (4,525 | ) |
|                                                                                                             |   |                                                |         |   |   |   |   |
| Net                  increase                  in cash                                                           |   |                                                | **11,681**   |   |   | (338 |  ) |
| Cash                  at                  beginning of period                                                    |   |                                                | **7,632**    |   |   | 2,509 |   |
|  **Cash                  at end of period**                                                                 |   | **$**                                               | **19,313**   |   | $ | 2,171 |   |
|                                                                                                             |   |                                                |         |   |   |   |   |
| **Reconciliation                  of net income to net cash provided by operating                  activities:** |   |                                                |         |   |   |   |   |
| Net                  income                                                                                      |   | **$**                                               | **17,389**   |   | $ | 15,103 |   |
| Depreciation                                                                                                     |   |                                                | **4,228**    |   |   | 4,230 |   |
| Deferred                  income taxes                                                                           |   |                                                | **(524**     | **)** |   | (1,822 | ) |
| Changes                  in                  assets and liabilities:                                             |   |                                                |         |   |   |   |   |
| Accounts                  receivable                                                                             |   |                                                | **(5,062**   | **)** |   | (10,058 | ) |
| Inventories                                                                                                      |   |                                                | **882**      |   |   | (17,727 | ) |
| Prepaid                  expenses and other current assets                                                       |   |                                                | **(1,085**   | **)** |   | 1,260 |   |
| Accounts                  payable                                                                                |   |                                                | **2,907**    |   |   | 6,957 |   |
| Accrued                  salaries, wages and benefits                                                            |   |                                                | **2,301**    |   |   | 4,663 |   |
| Other                  accrued                  expenses                                                         |   |                                                | **2,349**    |   |   | 1,294 |   |
| Other                  assets                                                                                    |   |                                                | **(56**      | **)** |   |  (205 | ) |
| Other                  long-term liabilities                                                                     |   |                                                | **(115**     | **)** |   | 1,013 |   |
| Net                  cash                  provided by operating activities                                      |   | **$**                                               | **23,214**   |   | $ | 4,708 |   |
|                                                                                                             |   |                                                |         |   |   |   |   |

----

**STANLEY      FURNITURE COMPANY, INC.**

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

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

|                                                                                                                                                                                                         |   | Three                Months                                                       |      | Nine                Months                                                        |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------|-----------|-----------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                         |   |                      Ended                          |      |                         Ended   |   |
|                                                                                                                                                                                                         |   | **                        October**       |      | September                                                                         |   | **October** |   |                       September |   |
|                                                                                                                                                                                                         |   | **                        1, 2005**  |      | 25,                2004                                                           |   | **                    1, 2005** |   |                    25, 2004 |   |
| Net                income as                reported                                                                                                                                                         |   | **$**                                                                             | **5,802** |                                                                              | $      | 5,285 |   | **$** | **17,389** |   | $ | 15,103 |   |
| Deduct:Total                stock-based employee compensation  expense                determined under fair value based method for                all                awards, net of related tax effects |   |                                                                              | **18**    |                                                                              |   | 452 |   |   | **495** |   |   | 1,350 |   |
| Pro                forma net                income                                                                                                                                                           |   | **$**                                                                             | **5,784** |                                                                              | $      | 4,833 |   | **$** | **16,894** |   | $ | 13,753 |   |
|                                                                                                                                                                                                         |   |                                                                              |      |                                                                              |   |   |   |   |   |   |   |   |   |
| Earnings                per                share:                                                                                                                                                            |   |                                                                              |      |                                                                              |   |   |   |   |   |   |   |   |   |
| Basic                - as                reported                                                                                                                                                            |   | **$**                                                                             | **0.45**  |                                                                              | $      | 0.42 |   | **$** | **1.35** |   | $ | 1.21 |   |
| Basic                - pro                forma                                                                                                                                                              |   | **$**                                                                             | **0.45**  |                                                                              | $      | 0.38 |   | **$** | **1.31** |   | $ | 1.10 |   |
|                                                                                                                                                                                                         |   |                                                                              |      |                                                                              |   |   |   |   |   |   |   |   |   |
| Diluted                - as                reported                                                                                                                                                          |   | **$**                                                                             | **0.44**  |                                                                              | $      | 0.40 |   | **$** | **1.31** |   | $ | 1.16 |   |
| Diluted                - pro                forma                                                                                                                                                            |   | **$**                                                                             | **0.44**  |                                                                              | $      | 0.37 |   | **$** | **1.27** |   | $ | 1.07 |   |

----

**Property,      Plant and Equipment**

|                                                      |   | **October                  1,** |        | December                  31, |   |
|-----------------------------------------------------------|--------|---------------------------------|-------------|-------------------------------|--------|
|                                                      |   | **2005**                        |        | 2004                          |   |
| Land                  and                  buildings      |   | **$**                           | **38,823**  |                          | $      | 38,775 |   |
| Machinery                  and                  equipment |   |                            | **75,756**  |                          |   | 74,846 |   |
| Office                  furniture and equipment           |   |                            | **5,108**   |                          |   | 2,386 |   |
| Property,                  plant and equipment, at cost   |   |                            | **119,687** |                          |   | 116,007 |   |
| Less                  accumulated depreciation            |   |                            | **68,717**  |                          |   | 64,665 |   |
| Property,                  plant and equipment, net       |   | **$**                           | **50,970**  |                          | $      | 51,342 |   |

 

**Debt**

|                                                                           |   |  **October                1,** |       | December                31, |   |
|--------------------------------------------------------------------------------|--------|-------------------------------------|------------|-----------------------------|--------|
|                                                                           |   | **2005**                            |       | 2004                        |   |
| 7.57%                senior                note due through June 30, 2005      |   |                                |       |                        | $      | 1,400 |   |
| 7.43%                senior                notes due through November 18, 2007 |   | **$**                               | **4,285**  |                        |   | 4,285 |   |
| 6.94%                senior                notes due through May 3, 2011       |   |                                | **8,572**  |                        |   | 10,000 |   |
| Total                                                                          |   |                                | **12,857** |                        |   | 15,685 |   |
| Less                current                maturities                          |   |                                | **2,857**  |                        |   | 4,257 |   |
| Long-term                debt, exclusive of current maturities                 |   | **$**                               | **10,000** |                        | $      | 11,428 |   |

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

|                                          |   | **Three                Months**                     |     | **Nine                Months**                      |   |
|-----------------------------------------------|--------|-----------------------------------------------------|----------|-----------------------------------------------------|--------|
|                                          |   | **Ended**                                      |     | **Ended**                                      |   |
|                                          |   | **October**                                         |     | September                                           |   | **                     October** |   |                   September |   |
|                                          |   | **                   1, 2005**  |     |                  25,                2004  |   | **                  1, 2005**   |   | 25,                2004  |   |
| Interest                cost                  |   | **$**                                               | **230**  |                                                | $      | 243 |   | **$** | **715** |   | $ | 730 |   |
| Expected                return on plan assets |   |                                                | **(248** | **)**                                               |   | (242 | ) |   | **(761** | **)** |   | (726 | ) |
| Net                amortization and deferral  |   |                                                | **106**  |                                                |   | 115 |   |   | **328** |   |   | 345 |   |
| Net                cost                       |   |                                                | **88**   |                                                |   | 116 |   |   | **282** |   |   | 349 |   |
| Settlement                expense             |   |                                                | **286**  |                                                |   | 143 |   |   | **859** |   |   | 578 |   |
| Total                expense                  |   | **$**                                               | **374**  |                                                | $      | 259 |   | **$** | **1,141** |   | $ | 927 |   |

|                                                                        |   | Three                Months                Ended  |   |   | Nine                Months                Ended  |   |
|------------------------------------------------------------------------|--------|--------------------------------------------------------|--------|--------|-------------------------------------------------------|--------|
|                                                                   |   | October              1,                           |   |   | September                                   |   |   | October  |   |   | September  |   |
|                                                                   |   | 2005                                              |   |   | 25,                2005                          |   |   | 1,                2005  |   |   | 25,                2005  |   |
| Service                cost                                            | **$**  | **22**                                                 |   | $      | 17                                                    |   | **$** | **66** |   | $ | 51 |   |
| Interest                cost                                           |   | **46**                                                 |   |   | 43                                                    |   |   | **138** |   |   | 129 |   |
| Amortization                of transitions obligation                  |   | **33**                                                 |   |   | 33                                                    |   |   | **99** |   |   | 99 |   |
| Amortization                of net actuarial loss                      |   | **17**                                                 |   |   | 10                                                    |   |   | **51** |   |   | 30 |   |
| Net                periodic                postretirement benefit cost | **$**  | **118**                                                |   | $      | 103                                                   |   | **$** | **354** |   | $ | 309 |   |

----

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

|                                                                                                              |   |                            Three Months |       |                                   Nine Months  |   |
|-------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------|------------|-----------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                              |   | Ended                                                                                |       |                           Ended                                                        |   |
|                                                                                                              |   | **                         October**              |       |                    September                                                                                                   |   | **October** |   | September |   |
|                                                                                                              |   | **                      1, 2005**                                |       | 25,                2004                                                                                                                       |   | **1,                2005** |   | 25,                2004  |   |
| Weighted                average shares outstandingfor                basic                calculation             |   |                                                                                           | **12,811** |                                                                                                                                          |   | 12,569 |   |   | **12,886** |   |   | 12,499 |   |
| Add:                Effect                of dilutive stock options                                               |   |                                                                                           | **387**    |                                                                                                                                          |   | 531 |   |   | **408** |   |   | 520 |   |
| Weighted                average shares outstanding,adjusted                for                diluted calculation |   |                                                                                           | **13,198** |                                                                                                                                          |   | 13,100 |   |   | **13,294** |   |   | 13,019 |   |

|                                                                   |   |                               |               |                                               |   |       |   | 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                                              |   |                               |               |                                               |   |       |   |          | **17,389**        |   |   |  |   |
| Exercise                of                stock options                |   |                               | **6**              |                                               |   | **6,329**  |   |          |              |   |   |   |   |
| Tax                benefit                on exercise of stock options |   |                               |               |                                               |   | **1,743**  |   |          |              |   |   |   |   |
| Stock                repurchases                                       |   |                               | **(6**             | **)**                                              |   | **(9,990** | **)**  |          |              |   |   |   |   |
| Stock                awards                                            |   |                               |               |                                               |   | **244**    |   |          |              |   |   |   |   |
| Cash              dividends paid, $.18 per share                       |   |                               |               |                                               |   |       |   |          | **(2,330)**  |   |   |   |   |
| **Balance,                October 1, 2005**                            |   | **$**                              | **257**            |                                               | **$**  | **8,533**  |   | **$**         | **132,011**       |   | **$** | **(151** | **)** |

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

----

**Management’s      Discussion and Analysis of Financial Condition and Results of      Operations**

**Results      of      Operations**

|                                                        |   | Three                Months  |   |   | Nine                Months  |   |
|-------------------------------------------------------------|--------|-----------------------------------|--------|--------|----------------------------------|--------|
|                                                        |   | Ended                        |   |   | Ended                       |   |
|                                                        |   | October                      |   |   | September              |   |   | October  |   |   | September                  |   |
|                                                        |   | 1,                2005       |   |   | 25,                2004     |   |   | 1,                2005  |   |   | 25,                2004  |   |
| Net                sales                                    |   | **100.0**                         | **%**  |   | 100.0                            | %      |   | **100.0** | **%** |   | 100.0 | % |
| Cost                of                sales                 |   | **76.1**                          |   |   | 75.4                             |   |   | **75.6** |   |   | 75.3 |   |
| Gross                profit                                 |   | **23.9**                          |   |   | 24.6                             |   |   | **24.4** |   |   | 24.7 |   |
| Selling,                general and administrative expenses |   | **13.0**                          |   |   | 13.5                             |   |   | **13.2** |   |   | 13.3 |   |
| Operating                income                             |   | **11.0**                          |   |   | 11.1                             |   |   | **11.2** |   |   | 11.4 |   |
| Other                income,                net             |   | **.1**                            |   |   | .1                               |   |   | **.1** |   |   | .1 |   |
| Interest                income                              |   | **.1**                            |   |   |                             |   |   | **.1** |   |   |   |   |
| Interest                expense                             |   | **.6**                            |   |   | .7                               |   |   | **.7** |   |   | .8 |   |
| Income                before                income taxes    |   | **10.5**                          |   |   | 10.5                             |   |   | **10.7** |   |   | 10.6 |   |
| Income                taxes                                 |   | **3.7**                           |   |   | 3.8                              |   |   | **3.8** |   |   | 3.8 |   |
| Net                income                                   |   | **6.8**                           | **%**  |   | 6.7                              | %      |   | **6.9** | **%** |   | 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 over financial reporting. There were no changes                in our                internal control over financial reporting that occurred during the                third                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)                         |
|                                                         |                     |                      |                                              |                                                |
| July                3 to                August 6, 2005       |                     |                      |                                              | $10,200,000                                         |
| August                7 to                September 3, 2005  |                     |                      |                                              | $10,200,000                                         |
| September                4                to October 1, 2005 | 86                       | $26.77                    | 86                                                | $10,200,000                                         |
|                                                         |                     |                      |                                              |                                                |
| Total                                                        | 86                       |  $26.77              | 86                                                |                                                |

| (a) | On                both April                27, 2005, and October 17, 2005, we announced that our Board of Directors                increased our stock repurchase authorization by an additional $10                million,                bringing the total amount authorized to $20.2 million. Consequently,                we                may purchase our common stock, from time to time, either directly                or                through agents, in the open market, through negotiated purchases                or                otherwise, at prices and on terms satisfactory to                us. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

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

| 3.1    | Restated                Certificate of Incorporation of the Registrant as amended (incorporated                by                reference to Exhibit 3.1 to the Registrant’s Form 10-Q (Commission File                No. 0-14938) for the quarter ended July 2, 2005). |   |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|   |                                                                                                                                                                                                                                                                            |   |
| 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).            |   |
|   |                                                                                                                                                                                                                                                                            |   |
| 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:                October                18, 2005 |   | **STANLEY                FURNITURE COMPANY, INC.**                                        |
|------------------------------------------------------|--------|-------------------------------------------------------------------------------------------|
|                                                 |   | By:                /s/                Douglas I. Payne                                    |
|                                                 |   | Douglas                I.                Payne                                            |
|                                                 |   | Executive                V.P. - Finance & Administration and                Secretary |
|                                                 |   | (Principal                Financial and Accounting Officer)                               |