<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

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

For the quarter ended March 31, 1997


    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)

                    136 Madison Avenue, New York, N.Y. 10016
               (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 April 30, 1997 was 13,959,650.
<PAGE>   2
                                MOVIE STAR, INC.

                      CONSOLIDATED CONDENSED BALANCE SHEETS
                                 (In Thousands)

<TABLE>
<CAPTION>
                                                                March 31,         June 30,
                                                                   1997            1996* 
                                                                 -------         -------
                                                               (Unaudited)
<S>                                                               <C>             <C>
                                     Assets
Current assets
  Cash                                                            $ 2,833         $ 2,283
  Receivables, net of allowances                                    7,681           7,415
  Inventory (note 3)                                               13,153          14,247
  Deferred income taxes                                             3,158           3,158
  Prepaid expenses and other
   current assets                                                     144             108
                                                                  -------         -------

         Total current assets                                      26,969          27,211

Property, plant and equipment (net)                                 4,262           4,569
Other assets                                                        1,775           1,979
Deferred income taxes                                                 851             851
                                                                  -------         -------

         Total assets                                             $33,857         $34,610
                                                                  =======         =======

                      Liabilities and Stockholders' Equity

Current liabilities
  Notes payable                                                   $    --         $    --
  Current maturities of long-term debt                                 48              45
  Accounts payable and accrued expenses                             7,266           7,760
                                                                  -------         -------
         Total current liabilities                                  7,314           7,805
                                                                  -------         -------

Long-term debt                                                     22,232          23,383
                                                                  -------         -------
Commitments and Contingencies

Stockholders' equity

  Common stock                                                        160             160
  Additional paid-in capital                                        3,731           3,731
  Retained earnings                                                 4,038           3,149
                                                                  -------         -------
                                                                    7,929           7,040

 Less: Treasury stock, at cost                                      3,618           3,618
                                                                  -------         -------

         Total stockholders' equity                                 4,311           3,422
                                                                  -------         -------

Total liabilities and stockholders' equity                        $33,857         $34,610
                                                                  =======         =======
</TABLE>


* Derived from audited financial statements.

See notes to consolidated condensed financial statements.
<PAGE>   3
                                MOVIE STAR, INC.

                 CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
                                   (Unaudited)

                    (In Thousands, Except Per Share Amounts)

<TABLE>
<CAPTION>
                                                       Three Months Ended                Nine Months Ended
                                                           March 31,                          March 31,
                                                     1997             1996             1997             1996
                                                   --------         --------         --------         --------
<S>                                                <C>              <C>              <C>              <C>
Net sales                                          $ 13,089         $ 12,408         $ 48,116         $ 70,056

Cost of sales (note 3)                                9,554            9,633           35,551           56,296
                                                   --------         --------         --------         --------

Gross profit                                          3,535            2,775           12,565           13,760
                                                   --------         --------         --------         --------

Selling, general and administrative
 expenses                                             3,212            3,919           10,075           13,679

Gain on purchase of subordinated debentures
 (Note 4)                                                --               --             (560)              --

Estimated loss on abandonment of
 leased premises (note 5)                                --               --               --            1,170
                                                   --------         --------         --------         --------
                                                      3,212            3,919            9,515           14,849        
                                                   --------         --------         --------         --------
Income (loss) from operations                           323           (1,144)           3,050           (1,089)

Interest expense                                        652              794            2,161            3,169
                                                   --------         --------         --------         --------
                                                 

Net (loss) income                                  $   (329)        $ (1,938)        $    889         $ (4,258)
                                                   ========         ========         ========         ========

Net (loss) income per share                        $   (.02)        $   (.14)        $    .06         $   (.31)
                                                   ========         ========         ========         ========

Weighted average number of shares
 outstanding                                         13,960           13,960           13,960           13,960
                                                   ========         ========         ========         ========
</TABLE>


See notes to consolidated condensed financial statements.
<PAGE>   4
                                MOVIE STAR, INC.

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

<TABLE>
<CAPTION>
                                                           Nine Months Ended March 31,
                                                              1997             1996
                                                             -------         --------
<S>                                                          <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)                                          $   889         $ (4,258)
   Adjustments to reconcile net income (loss) to
   net cash provided by operating activities:
     Depreciation and amortization                               546              610
     Gain on purchase of subordinated debentures                (560)              --
     Loss on sale/abandonment of fixed assets                                     301
     Changes in operating assets and liabilities:
       Receivables                                              (266)            (942)
       Inventory                                               1,094           20,971
       Prepaid expenses and other current assets                 (36)            (582)
       Other assets                                               78                4
       Accounts payable and accrued expenses                    (494)          (1,034)
                                                             -------         --------

          Net cash provided by operating activities            1,251           15,070
                                                             -------         --------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Expenditures for fixed assets                                 (113)            (263)
                                                           
  Proceeds from sale of property, plant and equipment             --              664
                                                             -------         --------
          Net cash (used in) provided by
            investing activities                                (113)             401
                                                             -------         --------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Net payment of short-term obligations                           --          (14,485)
  Net payment of long-term debt obligations                     (588)             (11)
                                                             -------         --------

          Net cash used in financing activities                 (588)         (14,496)
                                                             -------         --------

NET INCREASE IN CASH                                             550              975
CASH, beginning of period                                      2,283              103
                                                             -------         --------
CASH, end of period                                          $ 2,833         $  1,078
                                                             =======         ========


SUPPLEMENTAL DISCLOSURES OF CASH FLOW
 INFORMATION:
   Cash paid during period for:
     Interest                                                $ 1,072         $  2,487
                                                             =======         ========

     Income taxes (net of refunds received)                  $    42         $   (299)
                                                             =======         ========
</TABLE>

See notes to consolidated condensed financial statements.
<PAGE>   5
                                MOVIE STAR, INC.

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS



1.    In the opinion of the Company, the accompanying consolidated condensed
      financial statements contain all adjustments (consisting of only normal
      recurring accruals) necessary to present fairly the financial position as
      of March 31, 1997 and the results of operations for the interim periods
      presented and cash flows for the nine months ended March 31, 1997 and
      1996, respectively.

      The condensed consolidated 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 consolidated financial statements. The year-end
      condensed consolidated balance sheet was derived from the Company's
      audited financial statements. This Form 10-Q should be read in conjunction
      with the Company's consolidated financial statements and notes included in
      the 1996 Annual Report on Form 10-K.

2.    The results of operations for the three and nine months ended March 31,
      1997 are not necessarily indicative of the results to be expected for the
      full year.

3.    Certain items included in these statements are based upon estimates. The
      cost of sales is determined utilizing estimated gross profit rates. The
      calculation of the actual cost of sales is predicated upon a physical
      inventory taken at the end of each fiscal year.

      An approximate breakdown of the inventory in thousands is as follows:

<TABLE>
<CAPTION>
                                              Mar. 31,         June 30,
                                               1997              1996
                                              -------           -------
<S>                                           <C>               <C>
         Raw materials                        $ 3,343           $ 3,816
         Work-in-process                        1,662             1,950
         Finished goods                         8,148             8,481
                                              -------           -------
                                              $13,153           $14,247
                                              =======           =======
</TABLE>

    4.  During September 1996, the Company purchased $1,320,000 in principal
        amount of its 12.875% subordinated debentures. As a result of the
        transaction, the Company recorded a gain of $560,000, net of related
        costs, in the first quarter of fiscal 1997. The Company reduced its
        mandatory sinking fund requirements due in October 1996 with these
        debentures.

    5.  The Company abandoned certain leased premises and combined its divisions
        in an existing leased premise to reduce overhead and improve operating
        efficiencies. The Company provided a reserve in the second quarter of
        fiscal 1996 for estimated costs in connection with the abandonment of
        those leased premises of $900,000 and wrote-off the remaining net book
        value of related leasehold improvements of $270,000. In August 1996, the
        Company terminated and settled its remaining leasehold obligations with
        respect to the aforementioned abandoned floors for $800,000.
<PAGE>   6
                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 the Company's 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 the Company's customers; and the risk factors listed from time to time
in the Company's SEC reports.

OVERVIEW

The Company incurred substantial losses for the three years ended June 30, 1996.
These losses arose primarily from the Company's inability to maintain sufficient
gross profits due to a more competitive market, the weak retail demand for the
Company's products, difficulties in sourcing its goods offshore and insufficient
reductions in its overhead.

During fiscal 1996, the Company substantially liquidated all of the assets of
its low margin men's work and leisure shirt division. The Company eliminated
this division to focus on its core intimate apparel business. This action was
designed to alleviate certain pressures associated with that division's
operations namely, high inventory and capital requirements and poor return on
capital.

In fiscal 1996, the Company implemented a strategic plan to consolidate and
realign the operations of its core intimate apparel business from independent
divisions into a single operating unit thereby reducing costs and creating an
organizational structure that is designed to be more productive, effective and
efficient. As a result of the corporate consolidation and realignment, the
Company is in a better position to capitalize upon the strengths of its
management team and the organization as a whole.

In October 1996, the Company consummated an agreement that restructured a
significant portion of the Company's outstanding 12.875% unsecured subordinated
debentures. Also, in April 1996, the Company entered into an agreement with
Rosenthal & Rosenthal, a financial institution, providing for a secured
revolving line of credit of up to $13,500,000. These agreements are more fully
described in the Liquidity and Capital Resources section below.

As a result of these actions, the Company is now better positioned to continue
to improve its overall financial and operational performance and had income from
operations for the nine months ended March 31, 1997.

RESULTS OF OPERATIONS

Net sales for the three months ended March 31, 1997 increased by $681,000 (5%)
to $13,089,000 compared to the similar period in 1996. The increase in sales
resulted primarily from higher sales in the intimate apparel division of
$2,243,000, partially offset by the elimination of the men's work and leisure
shirt division.
<PAGE>   7
Net sales for the nine months ended March 31, 1997 decreased by $21,940,000
(31%) to $48,116,000 compared to the similar period in 1996. The decrease in
sales resulted primarily from the elimination of the men's work and leisure
shirt division and lower sales in the intimate apparel division of approximately
$17,527,000 and $4,219,000, respectively. The lower sales in the intimate
apparel division resulted primarily from the weak retail demand for the
Company's popular-priced products and the Company's efforts to eliminate low
margin business.

The gross profit percentage increased to 27.0% for the three months ended March
31, 1997 from 22.4% in the similar period in 1996. This increase was due
primarily to the elimination of the low margin men's work and leisure shirt
division.

The gross profit percentage increased to 26.1% for the nine months ended March
31, 1997 from 19.6% in the similar period in 1996. The increase was due
primarily to the elimination of the low margin men's work and leisure shirt
division and higher margins in the Company's intimate apparel product lines as
compared to the same period last year. The higher margins in the Company's
intimate apparel product lines resulted primarily from the Company's efforts to
address all components of its finished goods costs, including the countries in
which goods are manufactured, the sources of its piece goods and the overall
management of its costs.

The Company has not yet fully resolved its sourcing problems. However, in an
attempt to correct these problems, the Company had previously shifted a portion
of its production from the Caribbean and Central America to manufacturers
located in close proximity to Mexico City, Mexico. This allows the Company to
take advantage of lower duty rates that result from the North America Free Trade
Agreement and the availability of piece goods in Mexico. The use of Mexican
based manufacturers also enables the Company's senior management to more closely
monitor the production of these products. The Company has one employee located
in Mexico to monitor the production of its products.

Selling, general and administrative expenses decreased by $707,000 to $3,212,000
for the three months ended March 31, 1997 as compared to 1996. This decrease was
primarily due to reductions in salary expense and salary related costs of
approximately $460,000, and the combined effect of the recovery of bad debts and
bad debt expense of approximately $300,000, partially offset by increases
in other general overhead expenses.

Selling, general and administrative expenses decreased by $3,604,000 to
$10,075,000 for the nine months ended March 31, 1997 as compared to 1996. This
decrease was primarily due to the Company's consolidation and realignment of its
operations and lower sales volume. Specifically, the decrease resulted from
reductions in salary expense and salary related costs of approximately
$1,630,000, sales related expenses of approximately $258,000, rent expense of
approximately $470,000, and the combined effect of the recovery of bad debts
and bad debt expense of approximately $351,000 along with decreases in other
general overhead expenses.                                            

In September 1996, the Company purchased $1,320,000 in principal amount of its
12.875% subordinated debentures to meet a sinking fund payment due in October
1996. As a result of the transaction, the Company recorded a gain of $560,000,
net of related costs, in the first quarter of fiscal 1997.

In fiscal 1996, the Company abandoned two floors of its New York City offices in
connection with the Company's consolidation and realignment of its operations.
The Company provided a reserve of $900,000 for estimated costs in connection
with the abandonment of the two floors, and wrote-off the
<PAGE>   8
net remaining book value of related leasehold improvements of $270,000. In
August of 1996, the Company terminated and settled its remaining leasehold
obligations with respect to the aforementioned abandoned floors for $800,000.

The Company's results reflect income from operations of $323,000 and $3,050,000
for the three and nine months ended March 31, 1997, respectively, as compared
to a loss from operations of $1,144,000 and $1,089,000 for the same periods in
1996. This improvement was due to higher margins, lower selling, general and
administrative expenses, a gain on the Company's purchase of its subordinated
debentures and one-time charges taken in the prior year.

Interest expense for the three and nine months ended March 31, 1997 decreased by
$142,000 and $1,008,000, respectively, from the comparable periods in 1996 due
to lower borrowings coupled with the effect of the negotiated lower rate of
interest on a portion of the Company's long-term debt.
 
The Company's results reflect a net loss of $329,000 and net income of $889,000
for the three and nine months ended March 31, 1997, respectively, as compared
to net losses of $1,938,000 and $4,258,000 for the same periods in 1996.

No income tax provision or benefit was provided by the Company for the three and
nine months ended March 31, 1997 and 1996.

LIQUIDITY AND CAPITAL RESOURCES

The Company's current ratio improved to 3.5:1 as of June 30, 1996 and 3.7:1 as
of March 31, 1997 as compared to 1.9:1 and 2.6:1 as of June 30, 1995 and March
31, 1996, respectively.

For the nine months ended March 31, 1997, the Company's working capital
increased by $249,000 to $19,655,000, principally from profitable operations,
partially offset by a purchase of some of the Company's 12.875% subordinated
debentures.

During the nine months ended March 31, 1997, cash increased by $550,000. The
Company provided $1,251,000 from its operations. The Company used cash for the
purchase of fixed assets of $113,000 and the payment of long-term obligations of
$588,000.

Inventory at March 31, 1997 decreased by $1,961,000 to $13,153,000 from
$15,114,000 at March 31, 1996 due primarily to reductions in the intimate
apparel division.

During September 1996, the Company purchased $1,320,000 in principal amount of
its 12.875% subordinated debentures. As a result of the transaction, the Company
recorded a gain of $560,000, net of related costs, in the first quarter of
fiscal 1997. The Company partially satisfied its mandatory sinking fund
requirements with these debentures.

In September 1996, the Company delivered $3,750,000 of its 12.875% debentures,
that it had previously acquired, to the Indenture Trustee, in lieu of making the
mandatory sinking fund payment due October 1, 1996 in cash.

In October 1996, the Company consummated an agreement with holders of
$10,187,000 of the Company's outstanding 12.875% unsecured subordinated
debentures ("Restructured Bonds"). The holders of the Restructured Bonds
exchanged such bonds for the issuance of an equivalent principal amount of a new
series of notes bearing interest at a rate of 8% per annum, payable
semi-annually (April 1 and October 1) which are senior to the 12.875% debentures
("New Senior Notes"). Additionally, the holders of the Restructured Bonds
deferred the receipt of interest due April 1, 1996 (approximately $656,000) and
October 1, 1996 (approximately $433,000). The Company paid the interest due on
the
<PAGE>   9
remaining 12.875% debentures. The holders of the Restructured Bonds have
accepted New Senior Notes in exchange for the April 1, 1996 and the October 1,
1996 deferred interest related to the Restructured Bonds. The aggregate
principal amount of the New Senior Notes approximates $11,276,000. The New
Senior Notes do not provide for any amortization of principal and mature in
September 2001. As a result of the exchange, the Company will apply the entire
principal amount of the Restructured Bonds acquired by the Company of
$10,187,000 to its mandatory annual sinking fund payments through October 1999.
The Company's obligation to make mandatory sinking fund payments on the 12.875%
debentures will resume in October 1999 and continue until they mature in October
2001. The aggregate principal indebtedness of the New Senior Notes and the
12.875% subordinated debentures at March 31, 1997 is $22,209,000.

The New Senior Notes carry the right to convert up to approximately $716,000 of
the notes into 1,908,000 shares of the Company's common stock at a price of
$0.375 per share. In addition, the holders of the New Senior Notes have the
right to designate a representative to attend all meetings of the Company's
Board of Directors and Compensation Committee.

The Company does not anticipate any future significant purchases of its stock
and anticipates that capital expenditures for fiscal 1997 will be less than
$400,000. However, depending on price and the availability of funds, the Company
may seek to take advantage of opportunities to purchase its debentures.

The Company has a secured revolving line of credit of up to $13,500,000, through
June 1998, to cover the Company's projected needs for operating capital and
letters of credit to fund the purchase of imported goods. Direct borrowings
under this line bear interest at the annual rate of 2.5% above the prime rate of
Chase Manhattan Bank. Availability under the line of credit is subject to
certain agreed upon formulas. Under the terms of this financing, the Company has
agreed to pledge substantially all of its assets, except the Company's domestic
inventory and real property.

Management believes its available borrowing under its secured revolving line of
credit, along with anticipated internally generated funds, will be sufficient to
cover its working capital requirements.

CONTINUED STOCK EXCHANGE LISTING

The Company has been advised by the American Stock Exchange that, in view of the
Company's recent financial performance and the low price of its stock, the
Company has fallen below certain of its continued listing guidelines. Due to
these factors, the Exchange has informed the Company that it will continue to
review the Company's eligibility for continued listing on the Exchange.
<PAGE>   10
   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.
<PAGE>   11
PART II      Other Information

Item 1   -   Legal proceedings - Not Applicable

Item 2   -   Changes in Securities - Not Applicable

Item 3   -   Defaults Upon Senior Securities - Not Applicable

Item 4   -   Submission of Matters to a Vote of Security Holders - None

Item 5   -   Other Information - None

Item 6   -   (a) Exhibits

<TABLE>
<CAPTION>
Exhibit
Number           Exhibit                     Method of Filing
------           -------                     ----------------
<S>          <C>                             <C>
10.5.9       Amendment dated                 Filed herewith.
             April 14, 1997
             to Financing Agreement
             dated as of April 24, 1996
             between Rosenthal
             & Rosenthal, Inc. and
             the Registrant.
</TABLE>

         (b) Form 8-K Report - None


                                   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/ MARK M. DAVID
                                         -------------------------------
                                           MARK M. DAVID
                                           Chairman of the Board;
                                           Chief Executive Officer


                                     By: : /s/ SAUL POMERANTZ
                                         -------------------------------
                                             SAUL POMERANTZ
                                             Senior Vice President;
                                             Chief Financial Officer


May 15, 1997