Melt butter in a large heavy-bottomed pot over medium-high heat.
Add mushrooms and sauté until browned and moisture has evaporated, approximately 12 minutes.
Add onion and cook until translucent, approximately 5 minutes.
Stir in garlic and thyme; cook for 1 minute until fragrant.
Sprinkle flour over the vegetable mixture and stir constantly for 2 minutes to cook out the raw starch.
Slowly whisk in stock and sherry, scraping the bottom of the pot to release browned bits.
Bring to a boil, then reduce heat and simmer for 15 minutes.
Stir in heavy cream and season with salt and pepper.
Simmer for an additional 5 minutes until thickened.
Serve warm, garnished with fresh parsley.