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, 2003


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

For the transition period from                to
                                 ------------    -----------


Commission File Number         1-5893
                       ---------------------


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

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

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

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


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


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

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

The number of common shares outstanding on October 31, 2003 was 15,599,975.



<PAGE>


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




                                                                            Page
PART I.           Financial Information

  Item 1.    Financial Statements

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

      Statements of Income (Unaudited) for the Three Months Ended
       September 30, 2003 and 2002                                           4

      Condensed Statements of Cash Flows (Unaudited) for the
      Three Months Ended September 30, 2003 and 2002                       5 - 6

      Notes to Condensed Unaudited Financial Statements                   7 - 10


  Item 2.    Management's Discussion and Analysis of Financial
             Condition and Results of Operations                         11 - 14

  Item 3.    Quantitative and Qualitative Disclosures About
             Market Risk                                                    15

  Item 4.    Controls and Procedures                                        15


PART II.     Other Information                                              17

Signatures                                                                  17


                                       2


<PAGE>


PART  I.   FINANCIAL INFORMATION

    ITEM 1.      FINANCIAL STATEMENTS


                                MOVIE STAR, INC.
                            CONDENSED BALANCE SHEETS
                     (In Thousands, Except Number of Shares)


<TABLE>
<CAPTION>

                                                                              September 30,          June 30,      September 30,
                                                                                   2003               2003*            2002
                                                                            -----------------    -------------    ---------------
                                                                               (Unaudited)                          (Unaudited)
<S>                                                                        <C>                   <C>              <C>
                                     Assets

Current Assets
 Cash                                                                       $             228    $         219    $           194
 Receivables, net                                                                      12,068            8,992             11,964
 Inventory                                                                              9,505           10,392              9,020
 Deferred income taxes                                                                  2,028            2,511              1,463
 Prepaid expenses and other current assets                                                426              365                300
                                                                            -----------------    -------------    ---------------
        Total current assets                                                           24,255           22,479             22,941

Property, plant and equipment, net                                                      1,094            1,153              1,335
Deferred income taxes                                                                      50               50              2,662
Other assets                                                                              403              407                370
                                                                            -----------------    -------------    ---------------

        Total assets                                                        $          25,802    $      24,089    $        27,308
                                                                            =================    =============    ===============

                      Liabilities and Shareholders' Equity

Current Liabilities
 Notes payable                                                              $           4,020    $       2,277    $         8,681
 Current maturities of capital lease obligations                                           17               27                 41
 Accounts payable and other current liabilities                                         3,194            4,196              4,026
                                                                            -----------------    -------------    ---------------
         Total current liabilities                                                      7,231            6,500             12,748
                                                                            -----------------    -------------    ---------------


Long-term liabilities                                                                     337              325                266
                                                                            -----------------    -------------    ---------------

Commitments and Contingencies                                                               -                -                  -

Shareholders' equity
 Common stock, $.01 par value - authorized 30,000,000 shares; issued 17,592,000
   shares in September 2003, 17,412,000 in June
   2003 and 17,102,000 in September 2002                                                  176              174                171
 Additional paid-in capital                                                             4,468            4,353              4,147
 Retained earnings                                                                     17,208           16,355             13,594
                                                                            -----------------    -------------    ---------------
                                                                                       21,852           20,882             17,912

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

         Total shareholders' equity                                                    18,234           17,264             14,294
                                                                            -----------------    -------------    ---------------

Total liabilities and shareholders' equity                                  $          25,802    $      24,089    $        27,308
                                                                            =================    =============    ===============
</TABLE>

* Derived from audited financial statements.

See notes to condensed unaudited financial statements.

                                       3

<PAGE>


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

<TABLE>
<CAPTION>

                                                                                        Three Months Ended
                                                                                           September  30,
                                                                                  ------------------------------
                                                                                       2003            2002
                                                                                  ------------     -------------
<S>                                                                               <C>              <C>
Net sales                                                                         $     16,826     $      15,780
Cost of sales                                                                           11,544            11,094
                                                                                  ------------     -------------
  Gross profit                                                                           5,282             4,686

Selling, general and administrative expenses                                             3,819             3,469
                                                                                  ------------     -------------

  Income from operations                                                                 1,463             1,217

Interest income                                                                              -                (1)
Interest expense                                                                            42               102
                                                                                  ------------     -------------

  Income before income taxes                                                             1,421             1,116
Income taxes                                                                               568               446
                                                                                  ------------     -------------

  Net income                                                                      $        853     $         670
                                                                                  ============     =============

  BASIC NET INCOME PER SHARE                                                      $        .06     $         .04
                                                                                  ============     =============

  DILUTED NET INCOME PER SHARE                                                    $        .05     $         .04
                                                                                  ============     =============

Basic weighted average number of shares outstanding                                     15,502            15,085
                                                                                  ============     =============
Diluted weighted average number of shares outstanding                                   16,211            15,085
                                                                                  ============     =============
</TABLE>

See notes to condensed unaudited financial statements.

                                       4
<PAGE>


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

<TABLE>
<CAPTION>

                                                                                        Three Months Ended
                                                                                           September  30,
                                                                                  ------------------------------
                                                                                       2003            2002
                                                                                  ------------     -------------
<S>                                                                               <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net income                                                                       $        853     $         670
    Adjustments to reconcile net income to net cash used in
      operating activities:
    Depreciation and amortization                                                          106               102
    Provision for sales allowances and doubtful accounts                                   338               545
    Deferred income taxes                                                                  483               379
    Deferred lease liability                                                                15                27
 (Increase) decrease in operating assets:
    Receivables                                                                         (3,414)           (5,508)
    Inventory                                                                              887              (223)
    Prepaid expenses and other current assets                                              (61)              (97)
    Other assets                                                                            (9)              (38)
  Decrease in operating liabilities:
    Accounts payable and other current liabilities                                      (1,005)             (336)
                                                                                  ------------     -------------

    Net cash used in operating activities                                               (1,807)           (4,479)
                                                                                  ------------     -------------

 CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of equipment                                                                   (34)              (82)
                                                                                  ------------     -------------

      Net cash used in investing activities                                                (34)              (82)
                                                                                  ------------     -------------

 CASH FLOWS FROM FINANCING ACTIVITIES:
 Repayments of long-term debt and capital lease obligations                                (10)              (12)
 Proceeds from revolving line of credit, net                                             1,743             4,552
 Proceeds from exercise of employee stock options                                          117                 -
                                                                                  ------------     -------------

      Net cash provided by financing activities                                          1,850             4,540
                                                                                  ------------     -------------

 NET INCREASE (DECREASE) IN CASH                                                             9               (21)
 CASH, beginning of period                                                                 219               215
                                                                                  ------------     -------------

 CASH, end of period                                                              $        228     $         194
                                                                                  ============     =============
</TABLE>


                                                                        (Cont'd)
                                       5

<PAGE>

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

<TABLE>
<CAPTION>

                                                                                        Three Months Ended
                                                                                           September  30,
                                                                                  ------------------------------
                                                                                       2003            2002
                                                                                  ------------     -------------
<S>                                                                               <C>              <C>
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
   Cash paid during period for:
     Interest                                                                     $         42     $         102
                                                                                  ============     =============

     Income taxes                                                                 $        155     $           5
                                                                                  ============     =============

                                                                                                   (Concluded)

</TABLE>






See notes to condensed unaudited financial statements.



                                       6
<PAGE>


                                MOVIE STAR, INC.
                NOTES TO CONDENSED UNAUDITED FINANCIAL STATEMENTS



1.   Interim Financial Statements


     In the  opinion  of  the  Company,  the  accompanying  condensed  unaudited
     financial   statements  contain  all  adjustments   (consisting  of  normal
     recurring  accruals)  necessary to present fairly the financial position as
     of September 30, 2003 and the results of operations for the interim periods
     presented and cash flows for the three months ended  September 30, 2003 and
     2002, respectively.

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

2.   Stock Options

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

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


                                                          Three Months Ended
                                                             September 30,
                                                        -----------------------
                                                          2003           2002
                                                        --------       --------
     Net Income, as reported                            $    853       $    670
     Deduct stock-based employee cost, net of taxes           (4)           (19)
                                                        --------       --------
     Pro forma net income                               $    849       $    651
                                                        ========       ========

     Basic net income per share, as reported            $    .06       $    .04
     Deduct stock-based employee cost per share                -              -
                                                        --------       --------
     Pro forma basic net income per share               $    .05       $    .04
                                                        ========       ========

     Diluted net income per share, as reported          $    .05       $    .04
     Deduct stock-based employee cost per share                -              -
                                                        --------       --------
     Pro forma diluted net income per share             $    .05       $    .04
                                                        ========       ========

     Per share amounts may not add due to rounding.

                                       7
<PAGE>

3.   Recently Issued Accounting Standards

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

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

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


4.   Inventory

     The inventory consists of the following (in thousands):


                          September 30,       June 30,     September 30,
                               2003            2003             2002
                          --------------   -----------     -------------

     Raw materials        $        1,620   $     1,470     $       2,541
     Work-in process                 447           655               517
     Finished goods                7,438         8,267             5,962
                          --------------   -----------     -------------
                          $        9,505   $    10,392     $       9,020
                          ==============   ===========     =============

5.   Note Payable

     In June 2001, the Company  renegotiated  its revolving  credit  facility to
     provide  borrowings of up to $30,000,000  until its maturity date,  July 1,
     2004.  Due to an  amendment,  effective  November 7, 2002,  the interest on
     outstanding  borrowings  is  payable at the prime  rate,  but not less than
     4.25% per annum.  As of September 30, 2003,  the Company had  borrowings of
     $4,020,000 outstanding under the credit facility and also had approximately
     $5,307,000 of outstanding letters of credit. Availability under the line of

                                       8
<PAGE>

     credit is subject to the  Company's  compliance  with  certain  agreed upon
     financial   formulas.   Availability,   as  of  September  30,  2003,   was
     approximately  $8,600,000.  Under the terms of this financing,  the Company
     has agreed to pledge substantially all of its assets,  except the Company's
     real property.

6.   Commitments and Contingencies

     Employment  Agreement - In January 2003,  the Company and Mr.  Knigin,  the
     Company's CEO and  President,  finalized  their  negotiations  regarding an
     extension of Mr. Knigin's employment agreement, which was to expire on June
     30,  2004.  Under the terms of the  extended  agreement,  Mr.  Knigin is to
     receive total base  compensation  of $2,625,000  over the five-year term of
     the agreement, effective as of July 1, 2002 and continuing through June 30,
     2007. As of September 30, 2003, the remaining  financial  liability of this
     agreement  is  $2,025,000.  Mr.  Knigin  may also be  entitled  to  certain
     severance payments at the conclusion of the term of his agreement, provided
     the Company attains specified financial performance goals.

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

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

7.   Related Party

     Upon the retirement of its Chief Executive Officer,  Mark M. David, in July
     1999, the Company  entered into an agreement,  expiring in October 2011, to
     provide for future medical benefits. As of September 30, 2003 and 2002, the
     current   portion,   included  in  "Accounts   payable  and  other  current
     liabilities,"  amounted  to  $13,000  and  $10,000,  respectively  and  the
     long-term portion, included in "Long-term liabilities," amounted to $98,000
     and $82,000, respectively.

8.   Net Income Per Share

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


                                                              Three Months Ended
                                                                 September 30,
                                                              ------------------
                                                                2003       2002
                                                              -------    -------

        BASIC:
     Net income                                               $   853    $   670
                                                              =======    =======
     Basic weighted average number of shares outstanding       15,502     15,085
                                                              =======    =======
     Basic net income per share                               $   .06    $   .04
                                                              =======    =======

                                       9


<PAGE>

<TABLE>
<CAPTION>

                                                                                Three Months Ended
                                                                                    September 30,
                                                                                 2003            2002
                                                                               ---------      ---------
     <S>                                                                        <C>           <C>
        DILUTED:
     Net income                                                                $     853      $     670
                                                                               =========      =========


     Weighted average number of shares outstanding                                15,502         15,085
             Shares Issuable Upon Conversion of Stock Options                        670              -
             Shares Issuable Upon Conversion of Warrants                              39              -
                                                                               ---------      ---------
     Total average number of equivalent shares outstanding                        16,211         15,085
                                                                               =========      =========

     Diluted net income per share                                              $     .05      $     .04
                                                                               =========      =========
</TABLE>

     Options and warrants to purchase 2,570,000 shares of common stock at prices
     ranging  from $.4375 to $1.125 per share were  outstanding  as of September
     30, 2002,  but were not included in the  computation  of diluted net income
     per share since they would be considered antidilutive.










                                       10
<PAGE>


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


The  following  discussion  contains  certain  forward-looking  statements  with
respect  to  anticipated  results,  which are  subject  to a number of risks and
uncertainties.  Among the  factors  that could  cause  actual  results to differ
materially  are:  business  conditions  and  growth in 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.


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 its  accounting  policies to be  appropriate,  and actual results
generally have not materially differed from those determined using the necessary
estimates.

Our  accounting  policies are more fully  described  in Note 1 to the  financial
statements,  located  in the 2003  Annual  Report  on Form 10-K  filed  with the
Securities and Exchange  Commission.  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 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  -  The  Company  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.  The Company
also  estimates  expenses  for  customer   discounts,   programs  and  incentive
offerings. If market conditions were to decline, the Company may take actions to
increase  customer  incentive  offerings  possibly  resulting in an  incremental
expense at the time the incentive is offered.

                                       11
<PAGE>

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

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

Results of Operations
---------------------

Net sales for the three months ended September 30, 2003 increased  $1,046,000 to
$16,826,000 from  $15,780,000 in the comparable  period in 2002. The increase in
sales was due  primarily  to an  increase in programs  with  certain  customers.
Looking  beyond the first half of the fiscal  year,  it appears that some of our
larger  customers are placing their spring  business orders later this year than
they did last year as they  closely  monitor the timing of their  purchases  and
inventory levels.  As a result,  if those orders are received,  we will be faced
with shorter lead times for delivery. Fortunately, we have established excellent
working  relationships  with  many  of  our  overseas  manufacturers  and we are
confident we will be able to meet the challenge of delivering  quality  products
on time.  We are  hopeful  that our  customers'  delays in  placing  orders is a
temporary adjustment for them and will not result in a significant  reduction of
our overall business for the current fiscal year.

The gross  profit  percentage  increased  to 31.4% for the  three  months  ended
September 30, 2003 from 29.7% in the similar  period in 2002. The higher margins
resulted  primarily  from a better  product mix and the benefit of the Dominican
Republic as a source of supply.  The Company did not begin to fully  realize the
benefit of the Dominican Republic until the second quarter of fiscal 2003.

Selling,  general and administrative  expenses were $3,819,000,  or 22.7% of net
sales for the three months ended  September 30, 2003, as compared to $3,469,000,
or 22.0% of net sales for the similar period in 2002.  This increase of $350,000
resulted from an increase in salary expense and salary related costs of $162,000
and a net increase in general overhead expenses.

Income from  operations  increased  to  $1,463,000  for the three  months  ended
September 30, 2003 from $1,217,000 for the similar period in 2002. This increase
was due to higher sales and margins partially offset by higher selling,  general
and administrative expenses.

Net interest  costs for the three months ended  September 30, 2003  decreased by
$59,000  to $42,000  from  $101,000  in the  comparable  period in 2002,  due to
overall lower borrowing levels and lower interest rates.

The Company  provided  for income  taxes of $568,000  for the three months ended
September 30, 2003, as compared to a $446,000  income tax provision for the same
period in 2002. The Company utilized an estimated income tax rate of 40% in both
periods.

Net Income
----------

The Company had net income of $853,000  and  $670,000 for the three months ended
September 30, 2003 and 2002, respectively. The increase in net income was due to
higher sales and gross margins and lower interest costs  partially  offset by an
increase in selling,  general and administrative expenses and an increase in the
provision for income taxes.

                                       12
<PAGE>

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,  2003 (in
thousands):

<TABLE>
<CAPTION>
                                                                 Payments Due by Period
                                                            Within                                   After 5
                                              Total         1 Year       2-3 Years     4-5 Years      Years
                                          ------------   -----------     ---------     ---------   ---------
<S>                                       <C>            <C>             <C>           <C>         <C>
  Contractual Obligations
  -----------------------
  Credit Facility                         $      4,020   $     4,020     $       -     $       -   $       -
  Capital Leases                                    17            17             -             -           -
  Operating Leases                               8,633         1,185         2,382         2,325       2,741
  Consulting Agreement                             844           225           450           169           -
  Employment Contract                            2,025           506         1,088           431           -
                                          ------------   -----------     ---------     ---------   ---------
  Total Contractual Obligations           $     15,539   $     5,953     $   3,920     $   2,925   $   2,741
                                          ============   ===========     =========     =========   =========

                                                      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                       $      5,307   $     5,307     $       -     $       -   $       -
                                          ------------   -----------     ---------     ---------   ---------
  Total Commercial Commitments            $      5,307   $     5,307     $       -     $       -   $       -
                                          ============   ===========     =========     =========   =========
</TABLE>

Liquidity and Capital Resources
-------------------------------

For the three months ended  September 30, 2003,  the Company's  working  capital
increased by $1,045,000 to $17,024,000, primarily from profitable operations.

During the three months ended September 30, 2003, cash increased by $9,000.  The
Company used cash of $1,807,000 in its  operations,  $34,000 for the purchase of
fixed assets and $10,000 for the payment of capital lease  obligations.  The net
proceeds from  short-term  borrowings of $1,743,000 and the exercise of employee
stock options of $117,000 funded these activities.

Receivables at September 30, 2003  increased by $3,076,000 to  $12,068,000  from
$8,992,000  at  June  30,  2003.   This  increase  is  due  to  normal  shipping
fluctuations within the period.

Inventory at September 30, 2003 decreased by $887,000 to $9,505,000 from
$10,392,000 at June 30, 2003. This decrease is due to normal fluctuations within
the period.

The Company has a secured  revolving  line of credit of up to  $30,000,000.  The
revolving  line  of  credit  expires  July 1,  2004  and is  sufficient  for the
Company's  projected  needs for operating  capital and letters of credit to fund
the purchase of imported  goods through July 1, 2004.  Direct  borrowings  under
this line bear  interest at the prime rate of JP Morgan  Chase Bank but not less
than  4.25% per annum.  Availability  under the line of credit is subject to the
Company's  compliance  with certain  agreed upon financial  formulas.  Under the
terms of this financing,  the Company has agreed to pledge  substantially all of
its assets, except the Company's real property. At November 6, 2003, the Company
had $2,404,000 in borrowings outstanding.

                                       13
<PAGE>

Management  believes the available borrowing under its secured revolving line of
credit, along with anticipated internally generated funds, will be sufficient to
cover its working capital requirements through July 1, 2004.

The Company  anticipates that capital  expenditures for fiscal 2004 will be less
than $400,000.

Effect of New Accounting Standards
----------------------------------

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

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

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

Inflation
---------

The Company does not believe  that its  operating  results have been  materially
affected  by  inflation  during  the  preceding  three  years.  There  can be no
assurance, however, that the Company's operating results will not be affected by
inflation in the future.

                                       14
<PAGE>

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

Imports
-------

The  Company's  transactions  with its foreign  manufacturers  and suppliers are
subject to the risks of doing business abroad. The Company's import and offshore
operations are subject to constraints  imposed by agreements  between the United
States and a number of foreign  countries  in which the Company  does  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. The Company's imported products are also subject to
United  States  customs  duties and, in the  ordinary  course of  business,  the
Company  is 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 the Company's 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 the
Company's  operations and its ability to continue to import  products at current
or increased  levels.  The Company cannot predict the likelihood or frequency of
any such events occurring.


ITEM 4. CONTROLS AND PROCEDURES

Within the 90-day  period prior to the filing of this report,  an  evaluation of
the effectiveness of the Company's  disclosure  controls and procedures 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, the CEO and CFO 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.
Subsequent to the date of their evaluation, there were no significant changes in
the Company's  internal  controls or in other  factors that could  significantly
affect  these  controls,   including  any  corrective  actions  with  regard  to
significant deficiencies and material weaknesses.





                                       15
<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.








                                       16
<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

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

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

                  32.1       Section 1350 Certification.


              (b) Form 8-K Report

                        Date                 Items       Financial Statements
                        ----                 -----       --------------------

                  November 3, 2003           7, 12               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/ Melvyn Knigin
                                --------------------
                                  MELVYN KNIGIN
                                  President; Chief Executive Officer

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

November 12, 2003