Things have been messy of late for furniture retailers. And yes, you could say that's an understatement. Earlier this year, Motley Fool Hidden Gems selection Hooker Furniture (NASDAQ:HOFT) turned in numbers much lower than expected, and Pier 1 (NYSE:PIR), Bombay (NYSE:BBA), and Furniture Brands (NYSE:FBN) have all seen sales stagnate and inventories rise.

Rather than being a company-specific problem, it simply seems that folks just don't need a lot of furniture at the moment, or they are choosing to hold off on purchases. Plus, let's face it, the furniture business is very competitive. Besides the players above, there's also Ethan Allen (NYSE:ETH), Pottery Barn, Crate & Barrel, La-Z-Boy (NYSE:LZB), and Thomasville to name a few, and that's just off the top of my head.

So you might say I was a bit interested in and even looking forward to Stanley Furniture's (NASDAQ:STLY) (also a Hidden Gems recommendation) first-quarter earnings report. I'm interested mostly because the company managed to report upbeat sales for its previous quarter, but I discounted those numbers, since inventory and receivables growth both easily outpaced sales. This quarter, I wanted to see whether the company could turn in more strong sales growth but buck the inventory-growth trend. As we've reported many times here at the Fool, inventory and receivables growth that outpaces the growth in sales is cause for concern.

Unfortunately, the most recent quarter looks little different. Sales were up a nice 16% this quarter, but inventory growth again outpaced sales with a rise of 27.3%. On the bright side, receivables growth came in at only 12.2%. I'm not thrilled with the company's touting of its stock buyback during the quarter as being a positive for shareholders, when the purchases are really sopping up dilution. The company is not a huge option abuser, but you folks in North Carolina -- let's call these purchases what they are, all right?

It's not a pretty result for this quarter, but Stanley is not dearly priced, and the company is expecting to turn in earnings between $3.45 and $3.55 per share for the year, which would mean growth of 9%-12% vs. last year. To top it off, the company had a good quarter in terms of free cash flow. The inventory is the real story here, just as it is at Hooker Furniture and other furniture companies. To gain more of my investing dollars, I'll need to see that the inventory blues have begun to pass.

Want to know why Tom Gardner recommended both Hooker and Stanley for Motley Fool Hidden Gems? A free, 30-day trial is available now.

Fool contributor Nathan Parmelee owns shares in Hooker Furniture but has no financial interest in any of the other companies mentioned. The Motley Fool has a disclosure policy.