UPDATE 2-Stanley Furniture posts wider-than-expected Q1 loss

* Q1 loss $0.22/shr vs est loss $0.04/shr

* Sales fall 36 pct

* Sees Q2 revenue similar to Q1 (Adds background, details) April 15 (Reuters) - Stanley Furniture Co Inc (STLY.O) posted a wider-than-expected quarterly loss, hurt by a sharp sales decline due to the recession, and said it expects second-quarter revenue similar to that of the first quarter.

Sales of discretionary items such as furniture have been hit as consumers keep a tight grip on their wallets amid rising unemployment.

The furniture maker and retailer reported a net loss of $2.4 million, or 23 cents a share, compared with a profit of $1.0 million, or 10 cents a share, a year earlier.

Excluding restructuring charges, the company posted a loss of 22 cents a share.

For the first quarter ended March 28, sales dropped to $39.8 million, trailing three analysts' average expectation of $47.2 million.

"We expect second quarter revenues, seasonally the weakest sales period of the year, to be similar to the first quarter," CEO Albert Prillaman said in a statement.

Two analysts on average had expected the company to report second-quarter revenue of $46.8 million, according to Reuters Estimates.