NEW YORK -- Helped by lower interest costs, Chic by HIS, which makes jeans for the mass market, reported a profit of $696,000, or 7 cents a share, in the first quarter ended Feb. 4, rebounding from a loss of $1.3 million a year earlier.

The year-ago period included an extraordinary credit of $310,000 from a tax-loss carryforward.

Operating profits slid 13 percent, to $2.48 million, primarily due to a substantial increase in medical charges and severe weather conditions that led to a temporary closing of the company's plants in Tennessee.

Domestic gross margins fell to 20.6 percent of sales from 24 percent, while European gross margins increased to 44 percent of sales from 38.1 percent.

Sales moved up 14 percent, to $76.6 million from $67.2 million. Sales in the U.S. rose 9.5 percent, to $59.3 million, while European sales advanced 32.6 percent, to $17.3 million.

Interest costs declined 75 percent, to $1 million from $4 million, as a result of Chic's initial public offering in February 1993.

As of Feb. 5, the most recent date for which figures were available, domestic order backlog stood at $94.1 million, an 11.8 percent gain from the year-ago period. European backlog in U.S. currency was $21.1 million, an increase of 10.4 percent.

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