`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 September 30, 2005

[_]  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 [_]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act)

     Yes [_]   No [X]

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act)

     Yes [_]   No [X]

The number of common shares outstanding on October 31, 2005 was 15,686,634.



                                MOVIE STAR, INC.
                           FORM 10-Q QUARTERLY REPORT
                                TABLE OF CONTENTS

                                                                            PAGE
                                                                            ----

PART I. FINANCIAL INFORMATION

   Item 1. Financial Statements

      Consolidated Condensed Balance Sheets at September 30, 2005
      (Unaudited), June 30, 2005 (Audited) and September 30, 2004
      (Unaudited)                                                              3

      Consolidated Statements of Operations (Unaudited) for the
      Three Months Ended September 30, 2005 and 2004                           4

      Consolidated Condensed Statements of Cash Flows (Unaudited) for
      the Three Months Ended September 30, 2005 and 2004                     5-6

      Notes to Consolidated 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                                                           18

Signatures                                                                    18


                                        2



PART I. FINANCIAL INFORMATION

     ITEM 1. FINANCIAL STATEMENTS

                                MOVIE STAR, INC.
                      CONSOLIDATED CONDENSED BALANCE SHEETS
                        (In Thousands, Except Share Data)



                                                          September 30,   June 30,   September 30,
                                                              2005          2005*         2004
                                                          -------------   --------   -------------
                                                           (Unaudited)                (Unaudited)

                         Assets

Current Assets
Cash                                                         $   164      $   178       $   354
Receivables, net                                               7,930        5,973        10,642
Inventory                                                     11,052       11,730        14,381
Deferred income taxes                                          2,470        2,260         2,702
Prepaid expenses and other current assets                        710          372           631
                                                             -------      -------       -------
      Total current assets                                    22,326       20,513        28,710

Property, plant and equipment, net                               726          755         1,093
Deferred income taxes                                          2,473        2,473           148
Goodwill                                                         537          537           537
Assets held for sale                                             174          174            --
Other assets                                                     458          455           440
                                                             -------      -------       -------
      Total assets                                           $26,694      $24,907       $30,928
                                                             =======      =======       =======

         Liabilities and Shareholders' Equity

Current Liabilities
Note payable                                                 $ 8,298      $ 4,794       $10,142
Accounts payable and other current liabilities                 3,553        5,046         2,864
                                                             -------      -------       -------
      Total current liabilities                               11,851        9,840        13,006
                                                             -------      -------       -------
Long-term liabilities                                            501          390           379
                                                             -------      -------       -------

Commitments and Contingencies                                     --           --            --

Shareholders' equity
Common stock, $.01 par value - authorized 30,000,000
   shares; issued 17,679,000 shares in September
   2005, 17,657,000 in June 2005 and 17,637,000 in
   September 2004                                                177          177           176
Additional paid-in capital                                     4,768        4,747         4,729
Retained earnings                                             12,990       13,361        16,253
Accumulated other comprehensive income                            25           10             3
Less treasury stock, at cost--2,017,000 shares                (3,618)      (3,618)       (3,618)
                                                             -------      -------       -------
      Total shareholders' equity                              14,342       14,677        17,543
                                                             -------      -------       -------

Total liabilities and shareholders' equity                   $26,694      $24,907       $30,928
                                                             =======      =======       =======


* Derived from audited financial statements.

See notes to consolidated condensed unaudited financial statements.


                                       3



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

                                                        Three Months Ended
                                                           September 30,
                                                        ------------------
                                                           2005      2004
                                                         -------   -------
Net sales                                                $13,637   $12,830
Cost of sales                                              9,924     9,000
                                                         -------   -------
   Gross profit                                            3,713     3,830
Selling, general and administrative expenses               4,215     4,181
                                                         -------   -------
   Loss from operations                                     (502)     (351)
Interest expense                                             117        33
                                                         -------   -------
   Loss before benefit from income taxes                    (619)     (384)
Income tax benefit                                          (248)     (154)
                                                         -------   -------
   Net loss                                              $  (371)  $  (230)
                                                         =======   =======
   BASIC NET LOSS PER SHARE                              $  (.02)  $  (.01)
                                                         =======   =======
   DILUTED NET LOSS PER SHARE                            $  (.02)  $  (.01)
                                                         =======   =======
Basic weighted average number of shares outstanding       15,660    15,617
                                                         =======   =======
Diluted weighted average number of shares outstanding     15,660    15,617
                                                         =======   =======

See notes to consolidated condensed unaudited financial statements.


                                       4



                                MOVIE STAR, INC.
                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                 (In Thousands)

                                                          Three Months Ended
                                                             September 30,
                                                          ------------------
                                                            2005      2004
                                                          -------   -------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                                                  $  (371)  $  (230)
   Adjustments to reconcile net loss to net cash used
      in operating activities:
   Depreciation and amortization                               94        96
   Provision for sales allowances and doubtful accounts       611      (736)
   Stock compensation expense                                   3        --
   Deferred income taxes                                     (210)     (131)
   Deferred lease liability                                     2         8
   Issuance of common stock for directors' fees                18        --
(Increase) decrease in operating assets, net of effect
   of acquisition of business:
   Receivables                                             (2,563)   (2,329)
   Inventory                                                  678    (5,570)
   Prepaid expenses and other current assets                 (337)      (41)
   Other assets                                               (23)       (8)
Increase (decrease) in operating liabilities:
   Accounts payable and other liabilities                  (1,380)      203
                                                          -------   -------
   Net cash used in operating activities                   (3,478)   (8,738)
                                                          -------   -------

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of equipment                                        (45)     (147)
Acquisition of Sidney Bernstein & Son business                 --    (3,456)
                                                          -------   -------
   Cash used in investing activities                          (45)   (3,603)
                                                          -------   -------

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from revolving line of credit, net                 3,504    10,142
Proceeds from exercise of employee stock options               --        23
                                                          -------   -------
   Cash provided by financing activities                    3,504    10,165
                                                          -------   -------
Effect of exchange rate changes on cash                         5         3
                                                          -------   -------
NET DECREASE IN CASH                                          (14)   (2,173)
CASH, beginning of period                                     178     2,527
                                                          -------   -------
CASH, end of period                                       $   164   $   354
                                                          =======   =======

                                                                        (Cont'd)


                                        5



                                MOVIE STAR, INC.
                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                 (In Thousands)

                                                     Three Months Ended
                                                        September 30,
                                                     ------------------
                                                         2005   2004
                                                         ----   ----
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
   Cash paid during period for:
      Interest                                            $73    $10
                                                          ===    ===
      Income taxes                                        $ 4    $13
                                                          ===    ===

                                                                     (Concluded)

See notes to consolidated condensed unaudited financial statements.


                                        6



                                MOVIE STAR, INC.
         NOTES TO CONSOLIDATED CONDENSED UNAUDITED FINANCIAL STATEMENTS

1.   INTERIM FINANCIAL STATEMENTS

     In the opinion of the Company, the accompanying consolidated condensed
     unaudited financial statements contain all adjustments (consisting of
     normal recurring accruals) necessary to present fairly the financial
     position as of September 30, 2005 and the results of operations and cash
     flows for the three months ended September 30, 2005 and 2004.

     The consolidated 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, 2005 consolidated
     condensed balance sheet was derived from the Company's audited financial
     statements. The results of operations for the three months ended September
     30, 2005 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 2005 Annual Report
     on Form 10-K.

2.   STOCK OPTIONS

     Previously, pursuant to Accounting Principles Board Opinion No. 25,
     "Accounting for Stock Issued to Employees," the Company accounted for
     stock-based employee compensation arrangements using the intrinsic value
     method. Accordingly, no compensation expense had been recorded in the
     financial statements with respect to option grants, since the options were
     granted at/or above market value.

     Effective July 1, 2005 the Company adopted SFAS No. 123 (revised 2004),
     "Share Based Payment" ("SFAS No. 123R") which eliminates the use of APB 25
     and the intrinsic value method of accounting, and requires companies to
     recognize the cost of employee services received in exchange for awards of
     equity instruments, based on the grant date fair value of those awards, in
     the financial statements. The Company has adopted the modified prospective
     method whereby compensation cost is recognized in the financial statements
     beginning with the effective date based on the requirements of SFAS No.
     123R for all share-based payments granted after that date and for all
     unvested awards granted prior to that date.

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

                                                         Three Months Ended
                                                            September 30,
                                                         ------------------
                                                           2005      2004
                                                          -----     -----
Net loss, as reported                                     $(371)    $(230)
Add stock-based employee compensation expense,
   included in reported net loss, net of taxes                3        --
Deduct: stock-based employee compensation expense
   determined under fair value based method, net
   of taxes                                                  (3)       (4)
                                                          -----     -----
Pro forma net loss                                        $(371)    $(234)
                                                          =====     =====


                                        7



                                                         Three Months Ended
                                                            September 30,
                                                         ------------------
                                                           2005      2004
                                                          -----     -----
Basic net loss per share, as reported                     $(.02)    $(.01)
                                                          =====     =====
Pro forma basic net loss per share                        $(.02)    $(.01)
                                                          =====     =====
Diluted net loss per share, as reported                   $(.02)    $(.01)
                                                          =====     =====
Pro forma diluted net loss per share                      $(.02)    $(.01)
                                                          =====     =====

     During the quarter ended September 30, 2004, the Company granted options to
     purchase 75,000 shares of common stock under the 2000 Performance Equity
     Plan which were subsequently canceled. There were no options granted in the
     quarter ended September 30, 2005.

3.   INVENTORY

     Inventory consists of the following (in thousands):

                       September 30,   June 30,   September 30,
                            2005         2005          2004
                       -------------   --------   -------------
     Raw materials        $ 1,309       $ 1,574      $ 1,285
     Work-in process          292           382          252
     Finished goods         9,451         9,774       12,844
                          -------       -------      -------
                          $11,052       $11,730      $14,381
                          =======       =======      =======

4.   NOTE PAYABLE

     The Company has a secured line of credit with an international bank which
     matures on June 30, 2006 and is subject to annual renewals thereafter.
     Under the terms of this line of credit, the Company may borrow up to
     $20,000,000, in the aggregate, including revolving loans and letters of
     credit. As of September 30, 2005, the Company had outstanding borrowings of
     $8,298,000 under the facility and had approximately $5,683,000 of
     outstanding letters of credit. Availability under this line of credit is
     subject to the Company's compliance with certain financial formulas as
     outlined in the agreement. As of September 30, 2005, the Company was in
     compliance. Pursuant to the terms of the agreement, the Company pledged
     substantially all of its assets. Interest on outstanding borrowings is
     payable at a variable rate per annum, equal to the prime rate less 0.75
     percent (6.0 percent as of September 30, 2005).

5.   NET LOSS PER SHARE

     Basic net loss per share has been computed by dividing the applicable net
     loss by the weighted average number of shares outstanding. Diluted net loss
     per share has been computed by dividing the applicable net loss by the
     weighted average number of shares outstanding and common equivalents. For
     the three months ended September 30, 2005 and 2004, shares issuable upon
     conversion of stock options and warrants of 162,000 and 495,000,
     respectively, at prices ranging from $.4375 to $1.0625 per share were not
     included in the computation of diluted net loss per share since they would
     be considered antidilutive.


                                        8



6.   ACQUISITION

     On August 3, 2004, the Company completed its acquisition of certain assets
     of Sidney Bernstein & Son Lingerie, Inc. ("SB&S"), a New York based company
     engaged in the design, marketing and sale of women's lingerie and related
     apparel accessories, pursuant to an Asset Purchase Agreement, dated as of
     July 28, 2004. The transaction allows the Company to expand its offerings,
     as well as diversify its sales distribution.

     The assets were purchased for an aggregate price of $3,379,000. The Company
     also assumed $3,012,000 of SB&S' open purchase orders and received
     $7,408,000 of open customer orders. Pursuant to the Asset Purchase
     Agreement, the Company had also agreed to pay up to an additional
     $1,000,000 in the aggregate based upon certain gross profit levels
     generated by the Company's newly-established Sidney Bernstein & Son
     Division during the next three fiscal years (see below).

     The acquisition was accounted for by the purchase method of accounting and
     the acquisition consideration was allocated among the tangible and
     intangible assets in accordance with their estimated fair value on the date
     of acquisition. In accordance with SFAS No. 142, goodwill will be subject
     to impairment testing at least annually. The results of operations of SB&S
     since August 3, 2004, are included in the Company's consolidated statement
     of operations. The total amount of goodwill is expected to be deductible
     for income tax purposes. The acquisition consideration and allocation of
     that consideration are as follows:

ACQUISITION CONSIDERATION:
   Cash consideration paid                 $3,379,000
   Transaction related fees                    77,000
                                           ----------
      Total acquisition consideration      $3,456,000
                                           ==========

ALLOCATION OF ACQUISITION CONSIDERATION:
   Inventory                               $2,873,000
   Goodwill related to acquisition            537,000
   Covenant not to compete                     40,000
   Property and equipment                       4,000
   Other current assets                         2,000
                                           ----------
      Total                                $3,456,000
                                           ==========

     On August 3, 2004, the Company entered into an employment agreement with
     Daniel Bernstein, a former employee of SB&S, which was to expire on June
     30, 2007. Pursuant to the agreement, Mr. Bernstein was to receive a base
     compensation of $350,000 annually plus commission based on formulas, as
     defined, in the agreement. In addition, the Company was to issue Mr.
     Bernstein options to purchase 75,000 shares of common stock under the
     Company's 2000 Performance Equity Plan in both fiscal 2005 and 2006.

     Effective June 10, 2005, Mr. Bernstein terminated his employment agreement
     with the Company. In addition, due to Mr. Bernstein's termination, he is no
     longer entitled to be issued options and the Company is no longer required
     to pay the additional $1,000,000 under the Asset Purchase Agreement.

7.   CLOSING OF DISTRIBUTION FACILITY

     During fiscal year ended June 30, 2005, the Company recorded facility
     closing costs of $108,000, which includes severance and related salary and
     benefit costs of $58,000, relating to a plan to close the


                                        9



     distribution facility in Petersburg, Pennsylvania. The action was taken by
     the Company to enhance the Company's competitiveness, to reduce expenses
     and to improve efficiencies. During fiscal 2005, the Company reclassified
     certain property and equipment at its Petersburg, Pennsylvania facility to
     assets held for sale, as the Company expects to sell this facility in
     fiscal 2006. In connection with the Company's plan of disposal, management
     estimates that they will not incur a loss in liquidating these assets.

     As of September 30, 2005, the remaining accrued closing costs are $96,000,
     which includes severance and related salary and benefit costs of $49,000.

     The Company's distribution center in Poplarville, Mississippi was forced to
     close from August 29, 2005 to September 6, 2005 as a result of hurricane
     Katrina. Because some of the Company's employees were unable to return to
     work, the facility operated at less than full capacity until the middle of
     October 2005. In an effort to reduce the impact of this problem, the
     Company diverted some of its incoming inventory to a public warehouse
     operation in Los Angeles, California and to its Petersburg, Pennsylvania
     distribution facility. As a result, the distribution facility was reopened
     on a temporary basis to assist with shipping the Company's finished goods
     to its customers.


                                       10



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

Forward Looking Statements

When used in this Form 10-Q and in future filings by the Company with the
Commission, the words or phrases "will likely result," "management expects" or
"the Company expects," "will continue," "is anticipated," "estimated" or similar
expressions are intended to identify "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. Readers are
cautioned not to place undue reliance on any such forward-looking statements,
each of which speak only as of the date made. The Company has no obligation to
publicly release the result of any revisions which may be made to any
forward-looking statements to reflect anticipated or unanticipated events or
circumstances occurring after the date of such statements.

Such statements are subject to certain risks and uncertainties that could cause
actual results to differ materially from historical earnings and those presently
anticipated or projected. These risks are included in "Item 1: Business," "Item
1A: Risk Factors" and "Item 7: Management's Discussion and Analysis of Financial
Condition and Results of Operations" included in the Company's Annual Report on
Form 10-K for the fiscal year ended June 30, 2005 and in assessing
forward-looking statements contained herein, readers are urged to carefully read
those statements..

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; and the timing of orders placed by
the Company's customers.

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.

On August 3, 2004, we completed the acquisition of certain assets of Sidney
Bernstein & Son Lingerie, Inc. ("SB&S"), a company engaged in the design,
marketing and sale of women's lingerie and related apparel accessories. This
transaction allows us to expand our product offerings, as well as diversify and
broaden our sales distribution.


                                       11



During fiscal 2005 and 2004, we experienced a significant reduction in sales
that was primarily the result of receiving fewer orders from some of our larger
customers. However, we do not believe that this is a permanent trend and these
larger customers continue to welcome us to present our products to them. Absent
the addition of the SB&S division, the dollar volume of orders shipped in fiscal
2005 would have been lower than in fiscal 2004. Some of the orders shipped in
fiscal 2005 were from different customers than in fiscal 2004 and some of the
shipments were at a considerably lower gross margin.

We expect sales for the first half of fiscal 2006 to be lower than the first
half of fiscal 2005. However, even though the gross margin percentage is lower
in the first quarter of fiscal 2006 as compared to the first quarter of fiscal
2005, the orders for the first half of fiscal 2006 were taken with an overall
higher gross margin percentage and we therefore expect the gross margin
percentage to be higher for the six months ending December 31, 2005 as compared
to the same period last year.

Hurricane Katrina impacted our business operations during the quarter ended
September 30, 2005. Our distribution center in Poplarville, Mississippi was
forced to close from August 29th to September 6th as a result of the hurricane.
Operations at the Poplarville distribution center resumed once power was
restored to the facility on September 6th. Because some of our employees were
unable to return to work, the facility operated at less than full capacity until
the middle of October. In our effort to reduce the impact of this problem we
diverted some of our incoming inventory to a public warehouse operation in Los
Angeles, California and to our Petersburg, Pennsylvania distribution center,
which we closed during the fourth quarter of fiscal 2005. We reopened this
facility on a temporary basis to assist with shipping our goods to customers.
However, notwithstanding our best efforts, some orders were delayed and will be
shipped in the second quarter of fiscal 2006 instead of the first quarter. We
are also working with our insurance companies to minimize the financial impact
of this occurrence. As of the date of this report, even though we have not fully
determined the financial impact caused by the hurricane, we do not anticipate
the unrecoverable portion of the damage to have a material impact on our results
of operation.

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.

Management believes 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, management has found the
application of accounting policies to be appropriate, and actual results
generally do not differ materially from those determined using necessary
estimates.

Our accounting policies are more fully described in Note 1 to the consolidated
financial statements in our Annual Report on Form 10-K for the fiscal year ended
June 30, 2005. Management has 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. Management writes 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


                                       12



demand and market conditions. If actual market conditions are less favorable
than those projected by management, additional inventory write-downs may be
required.

Allowance for Doubtful Accounts/Sales Discounts - Management maintains
allowances for doubtful accounts for estimated losses resulting from the
inability of its 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. Management also
estimates allowances for customer discounts, orders and incentive offerings. If
market conditions were to decline, management may take actions to increase
customer incentive offerings possibly resulting in an incremental allowance at
the time the incentive is offered.

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 should
be able to realize our deferred tax assets in the future, a deferred tax asset
valuation allowance 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.

The following table shows each specified item as a dollar amount and as a
percentage of net sales in each fiscal period, and should be read in conjunction
with the consolidated financial statements included elsewhere in this Quarterly
Report on Form 10-Q (in thousands, except for percentages):



                                                       Three Months ended
                                                          September 30,
                                               ----------------------------------
                                                     2005               2004
                                               ---------------    ---------------

Net sales                                      $13,637   100.0%   $12,830   100.0%
Cost of sales                                    9,924    72.8%     9,000    70.1%
                                               -------   -----    -------   -----
   Gross profit                                  3,713    27.2%     3,830    29.9%
Selling, general and administrative expenses     4,215    30.9%     4,181    32.6%
                                               -------   -----    -------   -----
   Loss from operations                           (502)   (3.7)%     (351)   (2.7)%
Interest expense                                   117      .9%        33      .3%
                                               -------   -----    -------   -----
   Loss before income tax benefit                 (619)   (4.5)%     (384)   (3.0)%
Income tax benefit                                (248)   (1.8)%     (154)   (1.2)%
                                               -------   -----    -------   -----
Net loss                                       $  (371)   (2.7)%  $  (230)   (1.8)%
                                               =======   =====    =======   =====


Percent amounts may not add due to rounding.

RESULTS OF OPERATIONS

Net sales for the three months ended September 30, 2005 increased $807,000, or
6.3%, to $13,637,000 from $12,830,000 in the comparable period in 2004. The SB&S
division accounted for $4,020,000 of the sales in the current quarter as
compared to $3,119,000 of the sales in the prior year's quarter. The increase in
sales for SB&S is the result of our acquisition of SB&S in August 2004 and
having two months of sales in 2004 as compared to three months of sales in the
current year. Absent sales from the SB&S division, we had sales of $9,617,000 in
the current quarter as compared to $9,711,000 in the prior year's quarter. Due
to hurricane Katrina, there was a shift in orders from the first quarter to the
second quarter of fiscal 2006. However, even with this order shift, we expect
that sales for the second quarter of fiscal 2006 will be lower than the prior
year's second quarter primarily due to the shipment of a $7,000,000 low margin
order in the prior year's second quarter.


                                       13



The gross profit percentage decreased to 27.2% for the three months ended
September 30, 2005 from 29.9% in the same period in the prior year. The lower
overall margin resulted from a better product mix in the prior year, additional
costs due to hurricane Katrina and higher markdowns in the current year as
compared to the prior year. However, even though the gross margin percentage is
lower in the first quarter of fiscal 2006 as compared to the first quarter of
fiscal 2005, the orders for the first half of fiscal 2006 were taken with an
overall higher gross margin percentage and we therefore expect the gross margin
percentage to be higher for the six months ending December 31, 2005 as compared
to the same period last year.

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 $4,215,000, or 30.9% of net
sales for the three months ended September 30, 2005, as compared to $4,181,000,
or 32.6%, of net sales for the same period in the prior year. This increase of
$34,000 resulted from an increase in commissions of $91,000, royalties of
$51,000 and a net increase in other selling, general and administrative
expenses, partially offset by a decrease in samples and design related costs of
$73,000 and consulting fees of $42,000. The decrease in samples and design
related costs was the result of utilizing more of our internal staff in the
current year as well as not having the start up sample and design related costs
for the Maidenform line that we incurred in the prior year. The reduction in
consulting fees is related to the termination of our prior Chairman's services
in connection with our consulting agreement with him. The increase in
commissions is due to higher commissionable sales and the increase in royalties
is due to the Maidenform license agreement.

We recorded a loss from operations of $502,000 for the three months ended
September 30, 2005 compared to a loss from operations of $351,000 for the same
period in the prior year. This increased loss was due to lower gross margins and
higher selling, general and administrative expenses partially offset by higher
sales.

Interest expense for the three months ended September 30, 2005 increased by
$84,000 to $117,000 from $33,000 for the same period in the prior year, due
primarily to higher borrowing levels. The higher borrowing levels were the
result of the loss in fiscal 2005 and higher average inventory and accounts
receivable balances during the quarter.

We provided for an income tax benefit of $248,000 for the three months ended
September 30, 2005 compared to an income tax benefit of $154,000 for the same
period in 2004. We utilized an estimated income tax rate of approximately 40% in
both periods.

NET LOSS

We had a net loss of $371,000 for the three months ended September 30, 2005
compared to a net loss of $230,000 for the same period in the prior year. This
increased loss was due to lower gross margins, higher selling, general and
administrative expenses and an increase in interest expense, partially offset by
higher sales, and a larger income tax benefit in the current period as compared
to the same period last year.


                                       14



CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS

To facilitate an understanding of our contractual obligations and commercial
commitments, the following data is provided as of September 30, 2005 (in
thousands):



                                                    Payments Due by Period
                                          -----------------------------------------
                                           Within                           After 5
                                 Total     1 Year   2-3 Years   4-5 Years    Years
                                -------   -------   ---------   ---------   -------

Contractual Obligations
Credit Facility                  $8,298   $ 8,298     $   --      $   --      $ --
Licensing Agreement                 360       133        227          --         -
Operating Leases                  6,334     1,212      2,365       2,440       317
Consulting Agreements               452       339        113          --        --
Employment Contracts              1,534     1,025        509          --        --
                                -------   -------     ------      ------      ----
Total Contractual Obligations   $16,978   $11,007     $3,214      $2,440      $317
                                =======   =======     ======      ======      ====




                                            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                 $5,683     $5,683      $--         $--        $--
                                  ------     ------      ---         ---        ---
Total Commercial Commitments      $5,683     $5,683      $--         $--        $--
                                  ======     ======      ===         ===        ===


OFF-BALANCE SHEET ARRANGEMENTS

We have not created, and are not party to, any special-purpose or off-balance
sheet entities for the purpose of raising capital, incurring debt or operating
our business. We do not have any arrangements or relationships with entities
that are not consolidated into our financial statements that are reasonably
likely to materially affect our liquidity or the availability of capital
resources.

LIQUIDITY AND CAPITAL RESOURCES

For the three months ended September 30, 2005, our working capital decreased by
$198,000 to $10,475,000, primarily due to the loss from operations.

During the three months ended September 30, 2005, cash decreased by $14,000 to
$164,000 from $178,000 at June 30, 2005. We used $3,478,000 of cash in our
operations and $45,000 for the purchase of fixed assets. Net proceeds of
$3,504,000 from short-term borrowings primarily funded these activities.

Receivables, net of allowances, at September 30, 2005 increased by $1,957,000 to
$7,930,000 from $5,973,000 at June 30, 2005. This increase is due to higher
sales in the quarter ended September 30, 2005 as compared to the sales for the
quarter ended June 30, 2005.

Inventory at September 30, 2005 decreased by $678,000 to $11,052,000 from
$11,730,000 at June 30, 2005. This decrease is due to normal inventory
fluctuations.

Effective July 1, 2005, we renewed our revolving line of credit of up to
$20,000,000. The revolving line of credit expires June 30, 2006 and is
sufficient for our projected needs for operating capital and letters of credit
to fund the purchase of imported goods through June 30, 2006. Direct borrowings
under this line bear interest at the prime rate less three quarters of one
percent per annum. Availability under the line of


                                       15



credit is subject to the Company's compliance with certain agreed upon financial
formulas. We were in compliance with our current lender at September 30, 2005.
This line of credit is secured by substantially all of our assets.

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, 2006.

We anticipate that capital expenditures for fiscal 2006 will be less than
$700,000.

EFFECT OF NEW ACCOUNTING STANDARDS

There were no recently issued accounting standards that we believe will have a
material effect on our financial position, results of operations or cash flows.

INFLATION

We do not believe that our operating results have been materially affected by
inflation during the preceding three years. There can be no assurance, however,
that our operating results will not be affected by inflation in the future.

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 three months ended
September 30, 2005, borrowings peaked during the period at $9,958,000 and the
average amount of borrowings was $8,078,000.

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



ITEM 4. CONTROLS AND PROCEDURES

An evaluation of the effectiveness of the Company's disclosure controls and
procedures as of September 30, 2005 was made under the supervision and with the
participation of the Company's management, including the chief executive officer
and chief financial officer. Based on that evaluation, they concluded that the
Company's disclosure controls and procedures are effective to ensure that
information required to be disclosed by the Company in reports that it files or
submits 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 has been no change in the Company's internal control over
financial reporting that has materially affected, or is reasonably likely to
materially affect, the Company's internal control over financial reporting.


                                       17



PART II. OTHER INFORMATION

Item 6 - Exhibits

     31.1 Certification by Chief Executive Officer.

     31.2 Certification by Principal Financial and Accounting Officer.

     32   Section 1350 Certification.

                                   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 and Chief Executive
                                            Officer


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

November 10, 2005


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