UPDATE 1-Stanley Furniture Q2 loss widens

* Q2 loss $0.29/shr vs est loss $0.20/shr

* Sales down 28 pct at $42.3 mln

* Sees signs of sales levels bottoming out

July 15 (Reuters) - Stanley Furniture Co Inc (STLY.O) posted a wider-than-expected second-quarter loss as consumers remained reluctant to spend on discretionary items, but said sales levels may have reached a bottom.

However, the company said it saw no indication of any sustained upturn in sales.

For the quarter ended June 30, the company posted a net loss of $3 million, or 29 cents per share, compared with a loss of $68,000, or 1 cent per share, a year ago.

Analysts were expecting a loss of 20 cents a share, before special items, according to Reuters Estimates.

Sales fell 28 percent to $42.3 million, compared with analysts' expectations of $40 million.

The company, which suspended its dividend in January, also said it expects to receive about $6 million to $7 million in the fourth quarter due to an anti-dumping order.

Stanley plans to consolidate its Lexington, North Carolina warehouse operation to another company-owned warehouse space at Robbinsville by the year-end, and expects it to improve annual operating income by $1.3 million from 2010.

Shares of the company closed at $10.91 Wednesday on Nasdaq. (Reporting by Abhishek Takle in Bangalore; Editing by Unnikrishnan Nair)