SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q


X    Quarterly  Report Under Section 13 or 15(d) of the Securities  Exchange Act
     of 1934

     For the quarter ended December 31, 2003


     Transition  Report  Pursuant  to  Section  13 or  15(d)  of the  Securities
___  Exchange Act of 1934


     For the transition period from _________ to __________

     Commission File Number 1-5893

                                MOVIE STAR, INC.
     ----------------------------------------------------------------------
        (Exact name of Registrant as specified in its charter)


                New York                    13-5651322
     ---------------------------------------------------------------------------
     (State or other jurisdiction of      (I.R.S. Employer
      incorporation or organization)       Identification Number)


                   1115 Broadway, New York, N.Y.  10010
      --------------------------------------------------------------------------
      (Address of principal executive offices)   (Zip Code)

                                 (212) 684-3400
        ----------------------------------------------------------------
              (Registrant's telephone number, including area code)

          ------------------------------------------------------------
              (Former name, former address, and former fiscal year,
                         if changed since last report.)

     Indicate  by check mark  whether the  Registrant  (1) has filed all reports
     required to be filed by Section 13 or 15(d) of the Securities  Exchange Act
     of 1934 during the preceding 12 months (or for such shorter period that the
     Registrant was required to file such reports),  and (2) has been subject to
     such filing requirements for the past 90 days.

                     Yes   X          No
                        -------         ------

     The number of common shares outstanding on January 30, 2004 was 15,599,975.

<PAGE>


                                MOVIE STAR, INC.
                           FORM 10-Q QUARTERLY REPORT
                                      INDEX
<TABLE>
<CAPTION>
                <S>                                                             <C>

PART I. Financial Information                                                   Page

        Item 1.    Financial Statements

                Condensed Balance Sheets at December 31, 2003 (Unaudited),
                  June 30, 2003 (Audited) and December 31, 2002 (Unaudited)      3

                Statements of Income (Unaudited) for the Three and Six Months
                  Ended December 31, 2003 and 2002                               4

                Statements of Cash Flows (Unaudited) for the
                 Six Months Ended December 31, 2003 and 2002                  5 - 6

                Notes to Condensed Unaudited Financial Statements             7 - 10


       Item 2.     Management's Discussion and Analysis of Financial
                   Condition and Results of Operations                        11 - 16

       Item 3.     Quantitative and Qualitative Disclosures About Market Risk   16

       Item 4.     Controls and Procedures                                      17


PART II.          Other Information                                             18

       Item 6.     Exhibits and Reports on Form 8-K                             18


Signatures                                                                      19

Certifications
</TABLE>

                                       2

<PAGE>


PART  I.   FINANCIAL INFORMATION

     Item 1.  Financial Statements

                                                    MOVIE STAR, INC.
                                                CONDENSED BALANCE SHEETS
                                        (In Thousands, Except Share Information)
<TABLE>
<CAPTION>
<S>                                                                               <C>               <C>             <C>


                                                                                     December 31,       June 30,        December 31,
                                                                                        2003             2003*              2002
                                                                                    -------------      ----------       -----------
                                                                                      (Unaudited)                       (Unaudited)
                                     Assets

Current Assets
 Cash                                                                                 $ 1,245            $ 219              $ 168
 Receivables, net                                                                       8,141            8,992             10,420
 Inventory                                                                              8,362           10,392              9,688
 Deferred income taxes                                                                  1,792            2,511              1,037
 Prepaid expenses and other current assets                                                305              365                176
                                                                                     --------          -------             -------
        Total current assets                                                           19,845           22,479             21,489

Property, plant and equipment, net                                                      1,047            1,153              1,292
Deferred income taxes                                                                      50               50              2,662
Other assets                                                                              407              407                373
                                                                                     --------          -------             -------

        Total assets                                                                  $21,349          $24,089            $25,816
                                                                                     ========          =======            ========

                      Liabilities and Shareholders' Equity

Current Liabilities
 Notes payable                                                                          $   -           $2,277            $ 6,155
 Current maturity of long-term liabilities                                                  6               27                 38
 Accounts payable and accrued expenses                                                  2,330            4,196              4,296
                                                                                     --------          -------             -------
         Total current liabilities                                                      2,336            6,500             10,489
                                                                                     --------          -------             -------

Long-term liabilities                                                                     347              325                282
                                                                                     --------          -------             -------

Commitments and Contingencies                                                               -                -                  -

Shareholders' equity
 Common stock, $.01 par value - authorized 30,000,000 shares; issued 17,617,000
   shares in December 2003, 17,412,000 in June 2003
   and 17,102,000 in December 2002                                                        176              174                171
 Additional paid-in capital                                                             4,484            4,353              4,147
 Retained earnings                                                                     17,624           16,355             14,345
                                                                                     --------          -------             -------
                                                                                       22,284           20,882             18,663

 Less: Treasury stock, at cost - 2,017,000 shares                                       3,618            3,618              3,618
                                                                                     --------          -------             -------

         Total shareholders' equity                                                    18,666           17,264             15,045
                                                                                     --------          -------             -------

Total liabilities and shareholders' equity                                            $21,349          $24,089            $25,816
                                                                                     ========          =======            ========

* Derived from audited financial statements.

See notes to condensed unaudited financial statements.

</TABLE>

                                       3

<PAGE>


                                                      MOVIE STAR, INC.
                                                    STATEMENTS OF INCOME
                                                         (Unaudited)
                                        (In Thousands, Except Per Share Amounts)


<TABLE>
<CAPTION>
        <S>                                                                          <C>                 <C>
                                                                             Three Months Ended                 Six Months Ended
                                                                                December 31                      December 31,
                                                                             -------------------                ------------------
                                                                             2003          2002                 2003         2002
                                                                            ------        -----                ------       ------

Net sales                                                                   $14,166        $16,689           $30,992        $32,469
Cost of sales                                                                 9,889         11,426            21,433         22,520
                                                                            -------        -------           -------        --------
  Gross profit                                                                4,277          5,263             9,559          9,949

Selling, general and administrative expenses                                  3,554          3,893             7,374          7,362
                                                                            -------        -------           -------        --------

  Income from operations                                                        723          1,370             2,185          2,587

Interest income                                                                   -             (1)                -             (2)
Interest expense                                                                 28            119                70            221
                                                                            -------        -------           -------        --------

  Income before income taxes                                                    695          1,252             2,115          2,368
Income taxes                                                                    278            501               846            947
                                                                            -------        -------           -------        --------

  Net income                                                                  $ 417          $ 751            $1,269         $1,421
                                                                            =======        =======           =======        =======

  BASIC NET INCOME  PER SHARE                                                  $.03           $.05              $.08           $.09
                                                                            =======        =======           =======        =======

  DILUTED NET INCOME PER SHARE                                                 $.03           $.05              $.08           $.09
                                                                            =======        =======           =======        =======

Basic weighted average number of shares outstanding                          15,596         15,085            15,548         15,085
                                                                            =======        =======           =======        =======
Diluted weighted average number of shares outstanding                        16,274         15,089            16,241         15,087
                                                                            =======        =======           =======        =======
</TABLE>


See notes to condensed unaudited financial statements.


                                       4
<PAGE>

                                                      MOVIE STAR, INC.

                                             CONDENSED STATEMENTS OF CASH FLOWS
                                                         (Unaudited)
                                                       (In Thousands)

<TABLE>
<CAPTION>
<S>                                                                                                      <C>

                                                                                                     Six Months Ended
                                                                                                       December 31,
                                                                                                 -------------------------
                                                                                                   2003               2002
                                                                                                 -------             ------


CASH FLOWS FROM OPERATING ACTIVITIES:
 Net income                                                                                     $ 1,269           $ 1,421
    Adjustments to reconcile net income to net cash provided by (used in)
      operating activities:
    Depreciation and amortization                                                                   202               204
    Provision for sales allowances and doubtful accounts                                            373               435
    Deferred income taxes                                                                           719               805
    Deferred lease liability                                                                         29                54
 (Increase) decrease in operating assets:
    Receivables                                                                                     478            (3,854)
    Inventory                                                                                     2,030              (891)
    Prepaid expenses and other current assets                                                        60                26
    Other assets                                                                                    (16)              (46)
  Decrease in operating liabilities:
    Accounts payable and accrued expenses                                                        (1,873)              (68)
                                                                                                --------           -------

    Net cash provided by (used in) operating activities                                           3,271            (1,914)
                                                                                                --------           -------

 CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of equipment                                                                            (80)             (136)
                                                                                                --------           -------

      Net cash used in investing activities                                                         (80)             (136)
                                                                                                --------           -------

 CASH FLOWS FROM FINANCING ACTIVITIES:
 Repayments of long-term debt and capital lease obligations                                         (21)              (23)
 (Repayments of) proceeds from revolving line of credit, net                                     (2,277)            2,026
 Proceeds from exercise of employee stock options                                                   133                 -
                                                                                                --------           -------

      Net cash (used in) provided by financing activities                                        (2,165)            2,003
                                                                                                --------           -------

 NET INCREASE (DECREASE) IN CASH                                                                  1,026               (47)
 CASH, beginning of period                                                                          219               215
                                                                                                --------           -------

 CASH, end of period                                                                             $1,245             $ 168
                                                                                                ========           =======

                                                                                                               (Cont'd)
</TABLE>

                                       5
<PAGE>


                                                      MOVIE STAR, INC.

                                             CONDENSED STATEMENTS OF CASH FLOWS
                                                         (Unaudited)
                                                       (In Thousands)




                                                         Six Months Ended
                                                           December 31,
                                                      2003                2002
                                                    ------              ------

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
   Cash paid during period for:
     Interest                                            $70             $214
                                                       =====            =====

     Income taxes                                       $277             $14
                                                       =====            =====


                                                                     (Concluded)



See notes to condensed unaudited financial statements.


                                       6

<PAGE>


                                MOVIE STAR, INC.
                NOTES TO CONDENSED UNAUDITED FINANCIAL STATEMENTS



1.   Interim Financial Statements


     In the  opinion  of  the  Company,  the  accompanying  condensed  unaudited
     financial   statements  contain  all  adjustments   (consisting  of  normal
     recurring  accruals)  necessary to present fairly the financial position as
     of December 31, 2003 and the results of operations for the interim  periods
     presented  and cash flows for the three and six months  ended  December 31,
     2003 and 2002, respectively.

     The condensed  financial  statements and notes are presented as required by
     Form 10-Q and do not contain certain information  included in the Company's
     year-end  financial  statements.  The June 30, 2003 condensed balance sheet
     was derived from the Company's audited financial statements. The results of
     operations  for the three and six months  ended  December  31, 2003 are not
     necessarily  indicative  of the results to be  expected  for the full year.
     This Form 10-Q should be read in conjunction  with the Company's  financial
     statements and notes included in the 2003 Annual Report on Form 10-K.

2.   Stock Options

     Pursuant to Accounting  Principles  Board Opinion No. 25,  "Accounting  for
     Stock Issued to Employees," the Company  accounts for stock-based  employee
     compensation arrangements using the intrinsic value method. Accordingly, no
     compensation  expense has been  recorded in the financial  statements  with
     respect to option grants. The Company has adopted the disclosure provisions
     of SFAS No. 123,  "Accounting for Stock-Based  Compensation," as amended by
     SFAS No. 148,  "Accounting  for  Stock-Based  Compensation - Transition and
     Disclosure, an amendment of SFAS No. 123."

     Had the Company elected to recognize  compensation  expense for stock-based
     compensation  using the fair value method net income,  basic net income per
     share and diluted net income per share would have been as follows:

<TABLE>
<CAPTION>
<S>                                                                        <C>                          <C>


                                                                   Three Months Ended               Six Months Ended
                                                                       December 31,                    December 31,
                                                                 ------------------------          -----------------
                                                                   2003            2002            2003          2002
                                                                 --------       --------        --------      --------

       Net Income, as reported                                       $417         $751            $1,269      $1,421
       Deduct stock-based employee cost, net of taxes                  (4)         (19)               (7)         (39)
                                                                   ------       ------            ------      -------
       Pro forma net income                                          $413         $732            $1,262      $1,382
                                                                   ======       ======            ======      =======

       Basic net income per share, as reported                       $.03         $.05              $.08        $.09
       Deduct stock-based employee cost per share                       -            -                 -           -
                                                                   ------       ------            ------      -------
       Pro forma basic net income per share                          $.03         $.05              $.08        $.09
                                                                   ======       =======           ======      =======

       Diluted net income per share, as reported                     $.03         $.05              $.08        $.09
       Deduct stock-based employee cost per share                      -             -                 -            -
                                                                   ------       ------            ------      -------
       Pro forma diluted net income per share                        $.03         $.05              $.08        $.09
                                                                  =======       =======           ======      =======
</TABLE>

                                       7

<PAGE>


3.   Recently Issued Accounting Standards

     In December 2002, the FASB issued SFAS No. 148  "Accounting for Stock-Based
     Compensation  - Transition and  Disclosure,  an amendment of SFAS No. 123."
     The standard  provides  alternative  methods of transition  for a voluntary
     change to the fair value  method of  accounting  for  stock-based  employee
     compensation.  In addition, SFAS No. 148 amends the disclosure requirements
     of SFAS No. 123 to require more prominent and more frequent  disclosures in
     financial  statements about the effects of stock-based  compensation.  SFAS
     No. 148 is effective for fiscal years ending after  December 15, 2002.  The
     Company  does  not  plan to  change  to the  fair  value  based  method  of
     accounting  for  stock-based  employee  compensation  and has  included the
     disclosure  requirements  of SFAS  No.  148 in the  accompanying  financial
     statements.


     In January 2003, the FASB issued FASB Interpretation No. 46, "Consolidation
     of Variable Interest  Entities" ("FIN 46"). FIN 46 requires that a variable
     interest  entity be consolidated by a company if that company is subject to
     a  majority  of the  risk of  loss  from  the  variable  interest  entity's
     activities  or  entitled  to receive a majority  of the  entity's  residual
     returns or both. The consolidation  requirements  apply to the first fiscal
     year or interim  period ending after March 31, 2004. The adoption of FIN 46
     will not have a material  effect on the results of  operations or financial
     position.

     In April 2003,  the FASB issued SFAS No. 149,  "Amendment  of Statement No.
     133 on  Derivative  Instruments  and Hedging  Activities."  This  statement
     amends and  clarifies  accounting  for  derivative  instruments,  including
     certain derivative instruments embedded in other contracts, and for hedging
     activities  under SFAS No. 133.  This  statement is effective for contracts
     entered into or modified after June 30, 2003, except as for provisions that
     relate to SFAS No. 133  implementation  issues that have been effective for
     fiscal quarters that began prior to June 15, 2003, which should continue to
     be applied in accordance with their respective  dates. The adoption of this
     pronouncement  does not have a material effect on the results of operations
     or financial position.

     In May  2003,  the  FASB  issued  SFAS No.  150,  "Accounting  for  Certain
     Financial Instruments with Characteristics of both Liabilities and Equity."
     This statement  requires that certain  financial  instruments  that,  under
     previous  guidance,  issuers could account for as equity,  be classified as
     liabilities  in statements of financial  position.  Most of the guidance in
     SFAS  No.  150 is  effective  for  financial  instruments  entered  into or
     modified after May 31, 2003, and otherwise is effective at the beginning of
     the first interim  period  beginning  after June 15, 2003.  The adoption of
     this  pronouncement  does not have a  material  effect  on the  results  of
     operations or financial position.

4.   Inventory

     The inventory consists of the following (in thousands):

                             December 31,      June 30,        December 31,
                                2003            2003              2002
                            ------------       -------         -----------

     Raw materials             $  606           $1,470          $1,880
     Work-in process              616              655             921
     Finished goods             7,140            8,267          $6,887
                              -------         --------          ------
                              $ 8,362          $10,392          $9,688
                              =======         ========          ======

                                       8
<PAGE>

5.   Note Payable

     In June 2001, the Company  renegotiated  its revolving  credit  facility to
     provide  borrowings of up to $30,000,000  until its maturity date,  July 1,
     2004.  Due to an  amendment,  effective  November 7, 2002,  the interest on
     outstanding  borrowings  is  payable at the prime  rate,  but not less than
     4.25% per annum.  As of December  31, 2003,  the Company had no  borrowings
     outstanding under the credit facility and had  approximately  $3,402,000 of
     outstanding  letters of  credit.  Under the terms of the  revolving  credit
     facility,  the Company is required to meet certain financial covenants,  of
     which the Company is in compliance at December 31, 2003.  Availability,  as
     of December 31, 2003,  was  approximately  $10,500,000.  Under the terms of
     this  financing,  the  Company  agreed to pledge  substantially  all of its
     assets except for the Company's real property.


6.   Commitments and Contingencies

     Employment  Agreement - In January 2003,  the Company and Mr.  Knigin,  the
     Company's CEO and  President,  finalized  their  negotiations  regarding an
     extension of Mr. Knigin's employment agreement, which was to expire on June
     30,  2004.  Under the terms of the  extended  agreement,  Mr.  Knigin is to
     receive total base  compensation  of $2,625,000  over the five-year term of
     the agreement, effective as of July 1, 2002 and continuing through June 30,
     2007. As of December 31, 2003,  the remaining  financial  liability of this
     agreement  is  $1,900,000.  Mr.  Knigin  may also be  entitled  to  certain
     severance payments at the conclusion of the term of his agreement, provided
     the Company attains specified  financial  performance goals or if the David
     family  sells  substantially  all of their shares of the  Company's  common
     stock.

     On January 28, 2003, Mr. Knigin  voluntarily  surrendered and forfeited his
     options to purchase  1,000,000  shares of the Company's  common stock,  par
     value $.01 and  relinquished  any further  rights he may have had under the
     existing option agreements, which have now been terminated.

     Consulting  Agreement  - As of  January 1, 2003,  the  Company  and Mark M.
     David,  Chairman of the Board,  have  renegotiated  Mr. David's  consulting
     agreement  with the Company  that was to expire on June 30,  2004.  The new
     agreement is with Mr. David's  consulting  firm. Under the terms of the new
     agreement, Mr. David's consulting firm will provide the consulting services
     of Mr.  David to the Company and will  receive  annual  consulting  fees of
     $225,000  through  June 30, 2007 plus the  reimbursement  of expenses in an
     amount not to exceed $50,000 per year.


7.   Related Party

     Upon the retirement of its Chief Executive Officer,  Mark M. David, in July
     1999, the Company  entered into an agreement,  expiring in October 2011, to
     provide for future medical benefits.  As of December 31, 2003 and 2002, the
     current   portion,   included  in  "Accounts   payable  and  other  current
     liabilities,"  amounted  to  $13,000  and  $11,000,  respectively  and  the
     long-term portion, included in "Long-term liabilities," amounted to $94,000
     and $79,000, respectively.


                                       9

<PAGE>

8.   Net Income Per Share

     Net Income Per Share - The Company's  calculation  of basic and diluted net
     income per share are as follows (in thousands, except per share amounts):

<TABLE>
<CAPTION>
                <S>                                                      <C>                             <C>

                                                                          Three Months Ended           Six Months Ended
                                                                             December 31,                 December 31,
                                                                      ------------------------       ------------------
                                                                          2003        2002           2003          2002
                                                                        --------    ---------      ----------      ------
          BASIC:
       Net income                                                         $ 417        $751         $1,269        $1,421
                                                                        ========     ======         ======        ======

       Basic weighted average number of shares outstanding               15,596      15,085         15,548        15,085
                                                                        ========     ======         ======        ======
       Basic net income per share                                         $ .03        $.05           $.08          $.09
                                                                        ========     ======         ======        ======


          DILUTED:
       Net income                                                         $ 417        $751         $1,269        $1,421
                                                                        ========     ======         ======        ======

       Weighted average number of shares outstanding                     15,596      15,085         15,548        15,085
               Shares Issuable Upon Conversion of Stock Options             639           -            654             -
               Shares Issuable Upon Conversion of Warrants                   39           4             39             2
                                                                        --------    -------        -------        ------

       Total average number of equivalent shares outstanding             16,274      15,089         16,241        15,087
                                                                        ========     ======         ======        ======

       Diluted net income per share                                       $ .03        $.05           $.08          $.09
                                                                        ========     ======         ======        ======
</TABLE>

     Options to purchase 2,520,000 shares of common stock at prices ranging from
     $.50 to $1.125 per share were outstanding as of December 31, 2002, but were
     not included in the  computation of diluted net income per share since they
     would be considered antidilutive.


9.   Subsequent Event

     On February 10, 2004, Mark M. David, the Company's Chairman, and members of
     his family, entered into an agreement to sell all of their shares of common
     stock of the Company,  an aggregate of 3,532,644  shares,  or approximately
     22.7% of the total shares outstanding,  to TTG Apparel, LLC, for a purchase
     price of $1.70 per share. At the request of the purchaser,  the purchase of
     the shares was  approved  by the  Company's  Board of  Directors.  Upon the
     closing of the transaction, Mark M. David and Gary W. Krat will resign from
     the Company's  Board of  Directors.  The  transaction  is expected to close
     shortly after the filing of this Quarterly  Report.  This  transaction will
     activate a provision under the Company's  employment  agreement with Melvyn
     Knigin, its Chief Executive  Officer,  which requires the Company to make a
     lump sum payment to Mr. Knigin of approximately  $1,070,000 within 90 days.
     The Company will incur an expense in the third quarter for this amount.

                                       10

<PAGE>


 Item 2.           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS

The  following  discussion  contains  certain  forward-looking  statements  with
respect  to  anticipated  results,  which are  subject  to a number of risks and
uncertainties.  Among the  factors  that could  cause  actual  results to differ
materially are: business conditions and growth in our industry; general economic
conditions;  the  addition  or loss of  significant  customers;  the loss of key
personnel;  product development;  competition;  foreign government  regulations;
fluctuations in foreign currency  exchange rates;  rising costs of raw materials
and the  unavailability of sources of supply; the timing of orders placed by our
customers; and the risk factors listed from time to time in our SEC reports.

Overview

The intimate apparel business is a highly competitive industry.  The industry is
characterized   by  a  large  number  of  small  companies   selling   unbranded
merchandise,  and by several  large  companies  that have  developed  widespread
consumer  recognition of the brand names  associated  with  merchandise  sold by
these companies. In addition, retailers to whom we sell our products have sought
to expand  the  development  and  marketing  of their own  brands  and to obtain
intimate  apparel  products  directly from the same sources from which we obtain
our products.

The intimate  apparel business for the department  stores,  specialty stores and
regional chains is broken down into five selling seasons a year. We create a new
line of products  that  represent  our own brand name  "Cinema  Etoile" for each
selling season.  Our brand name does not have widespread  consumer  recognition,
although  it is well known by our  customers.  We sell our brand  name  products
primarily  during these selling seasons.  We also develop specific  products for
some of our larger accounts,  mass  merchandisers and national chains,  and make
between five and eight presentations  throughout the year to these accounts.  We
do not have  long-term  contracts  with any of our  customers  and therefore our
business is subject to unpredictable  increases and decreases in sales depending
upon the size and  number of orders  that we receive  each time we  present  our
products to our customers.

In fiscal 2003,  approximately 45% of our sales were made to mass merchandisers,
19% to national chains,  and 18% to department  stores. The balance of our sales
were unevenly distributed among discount,  specialty,  regional chain stores and
direct mail catalog marketers.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United  States of America  requires  the  appropriate
application of certain accounting policies,  many of which require estimates and
assumptions  about  future  events and their  impact on amounts  reported in the
financial  statements  and related  notes.  Since future events and their impact
cannot be determined with certainty,  the actual results will inevitably  differ
from  our  estimates.  Such  differences  could  be  material  to the  financial
statements.

We believe the application of accounting policies,  and the estimates inherently
required  by  the  policies,  are  reasonable.  These  accounting  policies  and
estimates are constantly  re-evaluated,  and adjustments are made when facts and
circumstances dictate a change.  Historically,  we have found the application of
our accounting policies to be appropriate, and actual results generally have not
materially differed from those determined using the necessary estimates.

                                       11

<PAGE>

Our  accounting  policies are more fully  described  in Note 1 to the  financial
statements  located in our Annual  Report on Form 10-K for the fiscal year ended
June 30,  2003  filed  with the  Securities  and  Exchange  Commission.  We have
identified certain critical accounting policies that are described below.

Inventory -  Inventory  is carried at the lower of cost or market on a first-in,
first-out  basis.  We  write  down  inventory  for  estimated   obsolescence  or
unmarketable inventory equal to the difference between the cost of inventory and
the estimated market value based upon assumptions about future demand and market
conditions.  If actual market conditions are less favorable than those projected
by us, additional inventory write-downs may be required.

Allowance for doubtful  accounts/Sales  discounts - We maintain  allowances  for
doubtful  accounts for  estimated  losses  resulting  from the  inability of our
customers to make required payments. If the financial condition of our customers
were to  deteriorate,  resulting  in an  impairment  of  their  ability  to make
payments,  additional  allowances may be required. We also estimate expenses for
customer  discounts  and  incentive  offerings.  If  market  conditions  were to
decline,  we may take actions to increase customer incentive  offerings possibly
resulting in an incremental expense at the time the incentive is offered.

Long-lived  assets - In the evaluation of the fair value and future  benefits of
long-lived assets, we perform an analysis of the anticipated undiscounted future
net cash flows of the related  long-lived  assets.  If the carrying value of the
related asset exceeds the undiscounted cash flows, the carrying value is reduced
to its fair value.  Various  factors  including  future  sales growth and profit
margins are included in this analysis. To the extent these future projections or
our strategies change, the conclusion  regarding  impairment may differ from the
current estimates.

Deferred  tax  valuation  allowance - In  assessing  the need for a deferred tax
valuation  allowance,  we consider future taxable income and ongoing prudent and
feasible tax planning strategies.  Since we were able to determine that we would
be able to  realize  our  deferred  tax assets in the  future,  in excess of its
recorded  amount,  an  adjustment  to the  deferred  tax  asset  was not  deemed
necessary.  Likewise,  should we determine  that we would not be able to realize
all or part of our net deferred tax asset in the future,  an  adjustment  to the
deferred  tax asset would be charged to income in the period such  determination
was made.

Results of  Operations

Net sales for the three months ended December 31, 2003  decreased  $2,523,000 to
$14,166,000 from $16,689,000 in the comparable period in 2002. Net sales for the
six months ended  December 31, 2003  decreased  $1,477,000 to  $30,992,000  from
$32,469,000  in the  comparable  period in 2002.  The  decrease in sales was due
primarily to an overall  extremely  poor holiday  season in intimate  apparel at
retail, which resulted in lower orders from most of our customers.

As a result of the poor  holiday  season in  intimate  apparel  at  retail,  the
retailers are refocusing  their spring and summer  purchasing  plans and to date
the  orders  we  have   received  for  the  January   through  June  period  are
significantly  lower  than we had at the same time last  year.  Accordingly,  we
anticipate  that we will  experience  a  significant  reduction in sales and net
income for the  remainder  of our fiscal  year,  which ends on June 30,  2004 as
compared to the January through June period in the prior year.

The gross  profit  percentage  decreased  to 30.2% for the  three  months  ended
December  31, 2003 from 31.5% in the similar  period in 2002.  The gross  profit
percentage  increased to 30.8% for the six months  ended  December 31, 2003 from
30.6% in the  similar  period in 2002.  The lower  margins  for the  three-month
period  resulted  primarily  from a poor retail  environment,  which resulted in
higher  markdowns in the current year's quarter.  The higher margins for the six
months resulted  primarily from the addition of the Dominican  Republic as a new
source for  contract  labor (which  resulted in reduced  labor  costs),  greater
efficiencies in the overall  production cycle and improved  customer  compliance
(which reduced customer deductions), partially offset by the higher markdowns in
the second quarter.


                                       12
<PAGE>

As a result of differences  between the accounting  policies of companies in the
industry  relating to whether  certain  items of expense are included in cost of
sales rather than recorded as selling  expenses,  the reported  gross profits of
different  companies,  including  our own,  may not be  directly  compared.  For
example,  we  record  the costs of  preparing  merchandise  for sale,  including
warehousing costs and shipping and handling costs, as a selling expense,  rather
than a cost of sale.  Therefore,  our gross profit is higher than it would be if
such costs were included in cost of sales.

Selling,  general and administrative  expenses were $3,554,000,  or 25.1% of net
sales for the three months ended  December 31, 2003, as compared to  $3,893,000,
or 23.3% of net sales for the similar period in 2002.  This decrease of $339,000
resulted  primarily from a more favorable than expected recovery of bad debts in
the current year of  approximately  $249,000,  a decrease in shipping expense of
$69,000,  commissions  of $47, 000 and a net general  overall  decrease in other
general and administrative  expenses,  partially offset by an increase in salary
expense and salary related costs of $72,000.  The recovery of bad debts resulted
primarily  from one customer that resolved our  bankruptcy  claim more favorably
than we had anticipated.  The lower shipping and commissions expense were due to
the lower  sales in the  period.  The higher  salary  expense  was the result of
higher compensation levels and an increased number of personnel.

Selling,  general and administrative  expenses were $7,374,000,  or 23.8% of net
sales for the six months ended December 31, 2003, as compared to $7,362,000,  or
22.7% of net sales for the  similar  period in 2002.  This  increase  of $12,000
resulted  primarily  from an increase in salary expense and salary related costs
of $234,000 as a result of higher compensation levels and an increased number of
personnel  and a net increase in general  overhead  expenses.  This increase was
partially  offset by a reduction in shipping and  commission  expense of $62,000
and  $90,000,  respectively,  which  resulted  from  lower  sales  and the  more
favorable recovery of bad debts discussed above.

Income from  operations  decreased to $723,000 and  $2,185,000 for the three and
six months ended December 31, 2003, as compared to $1,370,000 and $2,587,000 for
the similar  periods in 2002. The decrease for the three months was due to lower
sales  and  gross  margins,  partially  offset  by lower  selling,  general  and
administrative  expenses. The decrease for the six months was due to lower sales
and higher selling, general and administrative expenses,  partially offset by an
increase in gross margins.

Interest  expense  for the three and six  months  ended  December  31,  2003 was
$28,000 and $70,000  respectively,  as compared to $119,000 and $221,000 for the
similar periods in 2002.  This reduction was due to lower borrowing  levels as a
result of increased cash flow from our operations and lower interest rates.

We provided  for income  taxes of $278,000  and  $846,000  for the three and six
months  ended  December  31,  2003,  as compared to income taxes of $501,000 and
$947,000 for the similar  periods in 2002.  We utilized an estimated  income tax
rate of 40% in all of the periods.

We had net income of $417,000 and  $1,269,000 for the three and six months ended
December 31, 2003  respectively,  as compared to $751,000 and $1,421,000 for the
similar  periods in 2002.  The  decrease  for the three  months was due to lower
sales  and  gross  margins,  partially  offset  by lower  selling,  general  and
administrative expenses, lower interest expense and a lower tax provision in the
current year.  The decrease for the six months was due to lower sales and higher
selling, general and administrative expenses, partially offset by an increase in
gross margins,  lower interest  expense and a lower tax provision in the current
year.

                                       13
<PAGE>

As discussed  above, as a result of the poor holiday season in intimate  apparel
at retail and the reduced  amount of orders on hand,  we believe  that sales and
net income for the remainder of the fiscal year will be  significantly  reduced.
Net income will be further impacted by the approximate  $1,070,000  payment that
we expect to pay to our Chief Executive  Officer under his employment  agreement
as discussed in Note 9 to the financial statements.


Contractual Obligations and Commercial Commitments

To facilitate an  understanding  of our  contractual  obligations and commercial
commitments,  the  following  data is  provided  as of  December  31,  2003  (in
thousands):

<TABLE>
<CAPTION>
<S>                                             <C>           <C>            <C>        <C>           <C>


                                                                 Payments Due by Period
                                                         ---------------------------------------

                                                            Within                                  After 5
                                              Total         1 Year      2-3 Years     4-5 Years      Years
                                              -----         ------      ---------     ---------     --------
  Contractual Obligations
  Capital leases                                $  6           $  6          $  -         $  -          $  -
  Operating leases                             8,349          1,209         2,365        2,329         2,446
  Consulting agreement                           788            225           450          113             -
  Employment contract                          1,900            513         1,100          287             -
                                              ------        -------      --------      -------        -------
  Total contractual obligations              $11,043         $1,953        $3,915       $2,729        $2,446
                                             =======         ======        ======       ======        ======

</TABLE>
<TABLE>
<CAPTION>
<S>                                             <C>            <C>            <C>           <C>         <C>

                                                                Amount of Commitment Expiration Per Period
                                                                ------------------------------------------

                                            Total Amounts     Within                                  After 5
                                              Committed       1 Year       2-3 Years     4-5 Years     Years
                                            ------------     --------      ---------     ---------    --------
  Other Commercial Commitments
  Letters of credit                          $ 3,402          $3,402          $  -         $  -        $  -
                                             -------          ------          ----         ----        ----
  Total commercial commitments               $ 3,402          $3,402          $  -         $  -        $  -
                                             =======          ======          ====         ====        ====
</TABLE>


Liquidity and Capital Resources

For the six months ended  December 31, 2003,  our working  capital  increased by
$1,530,000 to $17,509,000, primarily from profitable operations.

During the six months ended December 31, 2003, cash increased by $1,026,000.  We
generated  cash of $3,271,000  from  operating  activities and $133,000 from the
exercise of employee stock  options.  We used cash of $2,277,000 for the payment
of our  short-term  borrowings,  $80,000 for the  purchase  of fixed  assets and
$21,000 for the payment of capital lease obligations.

                                       14
<PAGE>

Receivables  at December  31, 2003  decreased  by  $851,000 to  $8,141,000  from
$8,992,000 at June 30, 2003. This decrease is due to lower sales for the quarter
ending December 31, 2003 as compared to the quarter ending June 30, 2003.

Inventory  at December 31, 2003  decreased  by  $2,030,000  to  $8,362,000  from
$10,392,000 at June 30, 2003. This decrease is in both raw material and finished
products.  The reduction is primarily  due to the expected  decrease in business
for the January  through June 2004 period.  The decrease,  in raw materials,  is
also due to a lower volume of cut,  make and trim  production  that requires the
purchase of raw materials.

We have a secured  revolving line of credit of up to $30,000,000.  The revolving
line of credit  expires July 1, 2004 and is sufficient  for our projected  needs
for  operating  capital and  letters of credit to fund the  purchase of imported
goods through July 1, 2004.  Direct  borrowings under this line bear interest at
the  prime  rate of JP Morgan  Chase  Bank but not less  than  4.25% per  annum.
Availability  under the line of credit is subject to our compliance with certain
agreed upon financial formulas, of which we are in compliance as of December 31,
2003. Under the terms of this financing,  we agreed to pledge  substantially all
of our assets  except for our real  property.  At  February  5, 2004,  we had no
borrowings outstanding and had a cash balance of approximately $3,500,000.

As discussed in Note 9 to the financial statements, upon the closing of the sale
of common stock by Mark M. David and members of his family, we will be obligated
to pay our Chief  Executive  Office under his employment  agreement,  a lump-sum
payment of approximately  $1,070,000  within 90 days of closing.

We believe the available  borrowing under our secured  revolving line of credit,
along with anticipated  internally  generated funds, will be sufficient to cover
our working capital  requirements  through July 1, 2004. We expect to extend our
current  revolving  credit  agreement  for a period  of no less than one year or
negotiate a new line of credit with another  lending  institution  for a term of
not less than one year with terms no less favorable than the expiring terms.

We  anticipate  that  capital  expenditures  for  fiscal  2004 will be less than
$300,000.


Effect of New Accounting Standards

In  December  2002,  the FASB issued SFAS No. 148  "Accounting  for  Stock-Based
Compensation  - Transition  and  Disclosure,  an amendment of SFAS No. 123." The
standard  provides  alternative  methods of transition for a voluntary change to
the fair value method of accounting for stock-based  employee  compensation.  In
addition,  SFAS No. 148 amends the  disclosure  requirements  of SFAS No. 123 to
require more  prominent and more frequent  disclosures  in financial  statements
about the effects of  stock-based  compensation.  SFAS No. 148 is effective  for
fiscal  years ending  after  December 15, 2002.  We do not plan to change to the
fair value based method of accounting for stock-based employee  compensation and
have included the disclosure  requirements  of SFAS No. 148 in the  accompanying
financial statements.

In January 2003, the FASB issued FASB  Interpretation No. 46,  "Consolidation of
Variable Interest Entities" ("FIN 46"). FIN 46 requires that a variable interest
entity be  consolidated by a company if that company is subject to a majority of
the risk of loss from the variable interest  entity's  activities or entitled to
receive a majority of the entity's  residual returns or both. The  consolidation
requirements apply to the first fiscal year or interim period ending after March
31, 2004. The adoption of FIN 46 will not have a material  effect on the results
of operations or financial position.

                                       15
<PAGE>


In April 2003, the FASB issued SFAS No. 149,  "Amendment of Statement No. 133 on
Derivative  Instruments  and  Hedging  Activities."  This  statement  amends and
clarifies  accounting for derivative  instruments,  including certain derivative
instruments  embedded in other contracts,  and for hedging activities under SFAS
No. 133.  This  statement is effective  for  contracts  entered into or modified
after  June 30,  2003,  except as for  provisions  that  relate to SFAS No.  133
implementation  issues that have been  effective for fiscal  quarters that began
prior to June 15, 2003,  which should  continue to be applied in accordance with
their  respective  dates.  The  adoption of this  pronouncement  does not have a
material effect on the results of operations or financial position.

In May 2003,  the FASB issued SFAS No. 150,  "Accounting  for Certain  Financial
Instruments with Characteristics of both Liabilities and Equity." This statement
requires that certain  financial  instruments  that,  under  previous  guidance,
issuers could account for as equity,  be classified as liabilities in statements
of financial  position.  Most of the  guidance in SFAS No. 150 is effective  for
financial instruments entered into or modified after May 31, 2003, and otherwise
is effective at the beginning of the first interim period  beginning  after June
15, 2003. The adoption of this  pronouncement does not have a material effect on
the results of operations or financial position.


Item 3.

Quantitative and Qualitative Disclosures About Market Risk

We are subject to changes in the prime rate based on the Federal Reserve actions
and general market interest fluctuations. We believe that moderate interest rate
increases will not have a material  adverse impact on our results of operations,
or financial position, in the foreseeable future. For the fiscal year ended June
30,  2003,  borrowings  peaked  during the year at  $10,055,000  and the average
amount of borrowings was $6,352,000.

Imports

Transactions  with our foreign manufacturers and suppliers are subject to
the risks of doing  business  abroad.  Our import and  offshore  operations  are
subject to  constraints  imposed by  agreements  between the United States and a
number of foreign  countries in which we do business.  These  agreements  impose
quotas on the  amount  and type of goods  that can be  imported  into the United
States from these  countries.  Such  agreements  also allow the United States to
impose, at any time,  restraints on the importation of categories of merchandise
that,  under the terms of the agreements,  are not subject to specified  limits.
Our imported  products are also subject to United States  customs duties and, in
the ordinary course of business, we are, from time to time, subject to claims by
the United  States  Customs  Service  for duties and other  charges.  The United
States and other countries in which our products are manufactured may, from time
to time, impose new quotas, duties, tariffs or other restrictions,  or adversely
adjust presently prevailing quotas, duty or tariff levels, which could adversely
affect our operations and our ability to continue to import  products at current
or increased  levels.  We cannot predict the likelihood or frequency of any such
events occurring.

                                       16

<PAGE>

Item 4.

Controls and Procedures

An evaluation of the effectiveness of our disclosure  controls and procedures as
of December 31, 2003 was made under the supervision  and with the  participation
of the our management, including the Chief Executive Officer and Chief Financial
Officer. Based on that evaluation, the CEO and CFO concluded that our disclosure
controls and procedures are effective to ensure that information  required to be
disclosed by us in reports that we file or submit under the Securities  Exchange
Act of 1934 is recorded,  processed,  summarized  and  reported  within the time
periods specified in Securities and Exchange  Commission rules and forms. During
the most recently completed fiscal quarter, there were no significant changes in
our internal controls over financial reporting that has materially affected,  or
is  reasonably  likely to  materially  affect,  our  internal  control  over our
financial reporting.



        SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS UNDER THE SECURITIES
                         LITIGATION REFORM ACT OF 1995



Except for historical  information  contained  herein,  this Report on Form 10-Q
contains forward-looking statements within the meaning of the Private Securities
Litigation  Reform Act of 1995,  which involve certain risks and  uncertainties.
The  Company's  actual  results or  outcomes  may differ  materially  from those
anticipated. Important factors that the Company believes might cause differences
are  discussed  in the  cautionary  statement  under the  caption  "Management's
Discussion  and Analysis of Financial  Condition and Results of  Operations"  in
this Form  10-Q.  In  assessing  forward-looking  statements  contained  herein,
readers are urged to carefully read those statements.






                                       17


<PAGE>


PART II   Other Information

Item 4 - Submission  of Matters to a Vote of Security  Holders - On November 20,
2003, the Company held its Annual Meeting of  Shareholders in New York City. The
following individuals were elected as directors of the Company:


                                                 Votes Against or
      Name                Votes For                 Withheld

Mark M. David             13,947,481               257,156

Melvyn Knigin             13,935,185               269,452

Saul Pomerantz            13,947,483               257,154

Gary W. Krat              13,948,185               256,452

Joel M. Simon             13,948,185               256,452

Michael Salberg           13,946,555               258,082


The  shareholders  also considered the  ratification of the selection of Mahoney
Cohen & Company,  CPA, P.C. as the Company's auditors for the fiscal year ending
June 30, 2004.  The results of the vote to ratify the selection of Mahoney Cohen
& Company, CPA, P.C. as the Company's auditors were as follows:

                                    Votes Against or      Abstentions & Broker
                  Votes For           Withheld               Non-votes

                13,969,206            164,757                  70,674


Item 6   -    (a) Exhibits

             31.1       Rule 13a-14/15d-14 Certification by Chief Executive
                        Officer.

             31.2       Rule 13a-14/15d-14 Certification by Principal
                        Financial and Accounting Officer.

             32         Section 1350 Certification.



              (b) Form 8-K Report

               Date                 Items               Financial Statements
               -------              ------------        --------------------
               November 3, 2003     7, 12                       None


                                       18
<PAGE>

                                   SIGNATURES

     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned hereunto duly authorized.


                                MOVIE STAR, INC.


                                By:  /s/ Melvyn Knigin
                                    ----------------------
                                     MELVYN KNIGIN
                                     President; Chief Executive Officer


                                 By:  /s/ Thomas Rende
                                     ----------------------
                                      THOMAS RENDE
                                      Chief Financial Officer (Principal
                                      Financial and Accounting Officer)



February 11, 2004



                                       19