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, 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  October  31,  1997  was
      13,959,650.



<PAGE>





                                MOVIE STAR, INC.

                      CONSOLIDATED CONDENSED BALANCE SHEETS
                                 (In Thousands)

<TABLE>
<CAPTION>

                                                                           September 30,             June 30,
                                                                              1997                    1997*
                                                                           -------------           ------------
                                                                           (Unaudited)

                                                           Assets
<S>                                                                            <C>                      <C>  
Current assets
  Cash                                                                       $   604                   $ 3,035
  Receivables, net of allowances                                               8,945                     4,147
  Inventory (Note 3)                                                          18,083                    16,638
  Deferred income taxes                                                        2,291                     2,291
  Prepaid expenses and other
   current assets                                                                343                       205
                                                                             -------                   -------
         Total current assets                                                 30,266                    26,316

Property, plant and equipment (net)                                            4,184                     4,262
Other assets                                                                   1,588                     1,661
Deferred income taxes                                                          1,718                     1,718
                                                                             -------                   -------
         Total assets                                                        $37,756                   $33,957
                                                                             =======                   =======



                                            Liabilities and Stockholders' Equity

Current liabilities
  Notes payable                                                              $ 3,334                   $     -
  Current maturities of long-term debt                                            66                        73
  Accounts payable and accrued expenses                                        7,928                     7,607
                                                                             -------                   -------
         Total current liabilities                                            11,328                     7,680
                                                                             -------                   -------


Long-term debt                                                                22,322                    22,336
                                                                             -------                   -------

Commitments and Contingencies                                                      -                         -

Stockholders' equity
  Common stock                                                                   160                       160
  Additional paid-in capital                                                   3,731                     3,731

  Retained earnings                                                            3,833                     3,668
                                                                             -------                   -------
                                                                               7,724                     7,559

 Less: Treasury stock, at cost                                                 3,618                     3,618
                                                                             -------                   -------
         Total stockholders' equity                                            4,106                     3,941
                                                                             -------                   -------
Total liabilities and stockholders' equity                                   $37,756                   $33,957
                                                                             =======                   =======
</TABLE>


* Derived from audited financial statements.

See notes to consolidated condensed financial statements.



<PAGE>



                                MOVIE STAR, INC.

                 CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
                                   (Unaudited)

                    (In Thousands, Except Per Share Amounts)

<TABLE>
<CAPTION>


                                                                                 Three Months Ended
                                                                                    September 30,
                                                                          1996                       1997
                                                                        ---------                 ----------
<S>                                                                        <C>                        <C>  
Net sales                                                                $15,202                    $12,894

Cost of sales (Note 3)                                                    10,918                      9,609
                                                                         -------                    -------
Gross profit                                                               4,284                      3,285

Selling, general and administrative
 expenses                                                                  3,425                      3,171
                                                                         -------                    -------
Income from operations                                                       859                        114

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

Interest expense                                                             694                        737
                                                                         -------                    -------
Net income (loss)                                                        $   165                    $   (63)
                                                                         =======                    =======
Net income (loss) per share                                              $   .01                    $     -
                                                                            ====                       ====
Weighted average number of shares
 outstanding                                                              13,960                     13,960
                                                                         =======                    =======
</TABLE>


See notes to consolidated condensed financial statements.



<PAGE>



                                MOVIE STAR, INC.

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

<TABLE>
<CAPTION>


                                                                                       Three Months Ended September 30,
                                                                                        1997                        1996
                                                                                    -----------                 -----------
<S>                                                                                    <C>                       <C> 
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)                                                                 $   165                      $   (63)
  Adjustments to reconcile net income (loss) to
   net cash used in operating activities:
     Depreciation and amortization                                                      157                          180
     Gain on purchase of subordinated debentures                                          -                         (560)
     Other                                                                                -                            6
  (Increase) decrease in operating assets:
     Receivables                                                                     (4,798)                        (630)
     Inventory                                                                       (1,445)                      (1,889)
     Prepaid expenses and other current assets                                         (138)                        (124)
     Other assets                                                                        36                          (14)
   Increase in operating liabilities:
     Accounts payable and accrued expenses                                              321                          778
                                                                                    -------                      -------
       Net cash used in operating activities                                         (5,702)                      (2,316)
                                                                                    -------                      -------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of property, plant and equipment                                            (42)                         (50)
                                                                                    -------                      -------
       Net cash used in investing activities                                            (42)                         (50)
                                                                                    -------                      -------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Repayment of long-term debt and capital lease obligations                             (21)                        (757)
  Net proceeds from revolving line of credit                                          3,334                        1,458
                                                                                     ------                      -------
       Net cash provided by financing activities                                      3,313                          701
                                                                                     ------                      -------
NET DECREASE IN CASH                                                                 (2,431)                      (1,665)
CASH, beginning of period                                                             3,035                        2,283
                                                                                    -------                      -------
CASH, end of period                                                                 $   604                      $   618
                                                                                    =======                      =======
</TABLE>


                                                                    (Continued)



<PAGE>



                                MOVIE STAR, INC.

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

<TABLE>
<CAPTION>


                                                                                       Three Months Ended September 30,
                                                                                        1997                        1996
                                                                                     ----------                  -----------
<S>                                                                                    <C>                           <C>  
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
 INFORMATION:
   Cash paid during period for:
     Interest                                                                       $   101                      $   170
                                                                                    =======                      =======
     Income taxes (net of refunds received)                                         $    (1)                     $   (17)
                                                                                    =======                      =======



SUPPLEMENTAL DISCLOSURES OF NONCASH ACTIVITIES:
   Increase in long-term debt for interest paid in kind                             $     -                      $   217
   Decrease in accrued liabilities for interest paid in kind                              -                         (217)
                                                                                    -------                      -------
                                                                                    $     -                      $     -
                                                                                    =======                      =======

</TABLE>

                                                                  (Concluded)


See notes to consolidated condensed financial statements.

<PAGE>



                                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 September 30, 1997 and the results of operations for the interim periods
     presented and cash flows for the three months ended  September 30, 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 1997
     Annual Report on Form 10-K. 

2.   The results of operations for the three months ended September 30, 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:





                                      September 30,             June 30,
                                          1997                    1997
                                        ---------               -------

            Raw materials               $  3,476                $  5,503
            Work-in-process                2,516                   2,806
            Finished goods                12,091                   8,329
                                        ----------              ----------
                                         $18,083                 $16,638
                                        ==========              ==========

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 pre-tax 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.   In October 1997, the Company purchased  $500,000 in principal amount of its
     12.875%  subordinated  debentures.  As a  result  of the  transaction,  the
     Company will record a pre-tax gain of $94,000, net of related costs, in the
     second  quarter  of fiscal  1998.  The  Company  will  further  reduce  its
     mandatory  sinking  fund  requirements  due  in  October  1999  with  these
     debentures.

6.   In June 1997, the Financial Accounting Standards Board issued SFAS No. 131,
     "Disclosure About Segments of an Enterprise and Related Information," which
     is effective for the Company for the year ended June 30, 1999. SFAS No. 131
     requires  disclosure about operating segments in complete sets of financial
     statements and in condensed financial  statements of interim periods issued
     to  shareholders.  The new standard also  requires that the Company  report
     certain information about their products and services, the geographic areas
     in which  they  operate,  and  major  customers.  The  Company  has not yet
     determined the impact of the adoption of SFAS No. 131.



<PAGE>



                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  Registrant'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 Registrant's  customers;  and the risk factors listed from time to
time in the Company's SEC reports .

Results of Operations

Net sales for the three months ended  September  30, 1997  increased by 17.9% to
$15,202,000 from  $12,894,000 in the comparable  period in 1996. The increase in
sales resulted from higher sales in the intimate apparel division and the retail
division of approximately $2,073,000 and $366,000 respectively, offset partially
by a decrease in other  business.  Net sales in the  intimate  apparel  division
increased to $13,104,000 due to the Company's  refocused efforts in creating new
designs and competitive  products for its customers.  Net sales in the Company's
retail  division  increased to $2,084,000  primarily due to an expanded  product
line, which includes higher priced brand named products.

The gross  profit  percentage  increased  to 28.2% for the  three  months  ended
September 30, 1997 from 25.5% in the similar period in 1996. The gross margin in
the Company's intimate apparel division increased to 28.2% in 1997 from 26.0% in
the similar period in 1996. The higher margins in the intimate  apparel division
resulted primarily from the Company's decision to shift a significant portion of
its  production  to  Mexico-based  contractors  and,  to a  lesser  extent,  the
elimination  of  certain  problems  the  Company  had in the prior year with the
quality of certain of its imported finished goods (discussed  below).  The shift
in production to Mexico-based  contractors  allows the Company to take advantage
of lower duty rates that result from the North American Free Trade Agreement and
shorter  lead times  associated  with the raw  materials  that are  available in
Mexico. The proximity of the Mexico-based contractors also enables the Company's
senior  management to more easily monitor the production of these products.  The
gross margin for the retail division  increased to 28.1% for 1997 as compared to
22.9% in the similar period in 1996.  The higher margins in the retail  division
resulted primarily from lower markdowns taken in the current  three-month period
as compared to the same period in the prior year.

At the end of fiscal 1996 and extending  into the second quarter of fiscal 1997,
the Company continued to encounter problems with its imported finished goods. In
certain instances,  after taking delivery of the goods, the Company was required
to correct  manufacturing  defects before shipping the merchandise to one of the
Company's  customers.  Although  no loss of sales was  attributable  to the poor
quality  merchandise,  the  Company  incurred  costs of  approximately  $400,000
associated with correcting the quality problems,  which had a negative impact on
the financial results for fiscal 1997. In fiscal


<PAGE>



1997,  the Company  replaced  the senior  personnel  responsible  for its import
department  and hired two  employees  located in the Far East to  supervise  the
production  of its  products.  In addition,  the Company is now  purchasing  its
products from different manufacturers than it has in the past.

Selling, general and administrative expenses increased by $254,000 to $3,425,000
for the three months ended September 30, 1997 as compared to 1996. This increase
resulted from increases in general overhead expenses.

Income  from  operations  increased  to  $859,000  for the  three  months  ended
September 30, 1997,  from $114,000 for the similar period in 1996. This increase
in income  from  operations  was due to higher  margins  partially  offset by an
increase in selling,  general and administrative  expenses. The Company's retail
division  had a loss from  operations  of  $93,000  for the three  months  ended
September  30, 1997 as compared to a loss from  operations  of $203,000  for the
similar  period in 1996.  The  operational  results for the retail  division are
based on direct  operating  expenses and do not include any  indirect  corporate
overhead.

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 pre-tax gain of
$560,000, net of related costs, in the first quarter of fiscal 1997.

Interest  expense for the three months  ended  September  30, 1997  decreased by
$43,000 from the  comparable  period in 1996  primarily due to the purchase of a
portion of the Company's 12.875% subordinated debentures.

The Company did not provide for an income tax provision or benefit for the three
months ended September 30, 1997 and 1996.

The Company had net income of $165,000 for the three months ended  September 30,
1997 as  compared  to a net loss of $63,000  for the same  period in 1996.  This
improvement was due to higher margins and lower interest costs offset  partially
by an increase in selling, general and administrative expenses.


Liquidity and Capital Resources

For the three months ended  September 30, 1997,  the Company's  working  capital
increased by $302,000 to $18,938,000, principally from operating profits.

During the three months ended September 30, 1997, the Company used $5,702,000 in
its  operations,  $42,000 for the  purchase of fixed  assets and $21,000 for the
repayment of long-term debt. A decrease in cash of $2,431,000 and an increase in
short-term borrowings of $3,334,000 principally funded these activities.

Receivables  at September 30, 1997  increased by  $4,798,000 to $8,945,000  from
$4,147,000 at June 30, 1997. This increase is due to normal seasonal shipping


<PAGE>



fluctuations within the period, for the Company's intimate apparel division.

Inventory at September  30, 1997  increased by $1,445,000  to  $18,083,000  from
$16,638,000  at June 30, 1997.  This  increase in both the intimate  apparel and
retail divisions  resulted from the normal  fluctuation in sales during the July
through December period. The inventory for the retail division also increased as
a result of the early receipt of goods due to favorable buying opportunities and
an expanded product line that includes higher priced brand named products.

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  $434,000).  The Company paid the interest due on
the remaining  12.875%  debentures.  The holders of the Restructured  Bonds have
also  accepted New Senior Notes in exchange for the April 1, 1996 and October 1,
1996  deferred  interest  related  to  the  Restructured  Bonds.  The  aggregate
principal  amount of the New  Senior  Notes  approximates  $11,276,500.  The New
Senior  Notes do not provide for any  amortization  of  principal  and mature on
September 1, 2001. As a result of the exchange,  the Company  applied 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. The aggregate principal  indebtedness of
the New Senior Notes and the 12.875% subordinated  debentures after the exchange
is approximately $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.

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 pre-tax gain of approximately  $560,000, net of related costs, in the
first quarter of fiscal 1997.  The Company  reduced its  mandatory  sinking fund
requirements with these debentures.

In September 1996, the Company delivered  $3,750,000 of its 12.875% subordinated
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.

The Company does not anticipate making any additional purchases of its stock and
anticipates  that  capital  expenditures  for  fiscal  1998  will be  less  than
$500,000.



<PAGE>



In October  1997,  the Company  purchased  $500,000 in  principal  amount of its
12.875%  subordinated  debentures.  As a result of the transaction,  the Company
will  record a pre-tax  gain of  $94,000,  net of related  costs,  in the second
quarter of fiscal 1998.  The Company will further  reduce its mandatory  sinking
fund  requirements  due  in  October  1999  by the  principal  amount  of  these
debentures.  Depending  on  price  and  availability,  the  Company  may seek to
purchase an additional portion of its outstanding  12.875% debentures to further
reduce its sinking fund obligation and reduce interest expense.

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.  This  credit  facility  replaced  the  financing
agreements which the Company had with two banks.

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,  it has  determined  to defer further
consideration of the Company's continued listing eligibility, subject to routine
periodic  reviews of the  Company's  filings  with the  Securities  and Exchange
Commission.



<PAGE>



              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>


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 
                    27.   Financial Data Schedule

              (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
                                                     Executive Vice President;
                                                     Chief Financial Officer


November 14, 1997

<PAGE>

EXHIBIT INDEX 

EXHIBIT                  
NUMBER                   DESCRIPTION                

27                       Financial Data Schedule    




<PAGE>