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Forget the market crash. I’d buy this growth stock with my new ISA allowance

The coronavirus has hit retailing hard, but a quick scan of fast-fashion giant Boohoo‘s (LSE: BOO) latest results goes some way to explaining why I’d have no issue buying the stock with my new ISA allowance in this market crash.

Profits jump

Revenue jumped by 44% to £1.24bn over the year to the end of February with growth recorded in all of the company’s geographies. Indeed, the fact that overseas sales now account for 45% of revenue gives some indication of how quickly Boo’s international footprint is expanding.

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Broken down, sales at its eponymous brand and the increasingly popular PrettyLittleThing both rose 38%. The number of active customers rose 28% and 26% respectively.

Although still a much smaller part of the business, revenue at Nasty Gal more than doubled. For me, this is further evidence of just how adept the £3bn-cap is at acquiring and developing other brands.

If you suspect all this would feed down to a superb bottom line, you’d be right. Despite a reduction in margins as a result of investing in its brands, the AIM-listed star still managed to deliver a stonking 54% rise in pre-tax profit to £92.2m. 

What market crash?

As superb as today’s numbers are, investors are likely far more interested in how the company has been performing during the market crash. On this front, it doesn’t sound like there’s too much to worry about. 

Trading from the middle of March had been “mixed,” with a “marked decrease in year-on-year growth” recorded. Nevertheless, Boo went on to say that things have started to improve in April. I doubt many in the sector could say the same.

While some may be alarmed by the decision to refrain from providing guidance on the current financial year, Boo sought to assuage these concerns by saying it had already stress-tested the business. Even with a drop in demand for clothing, the star perfotmer concluded it was “comfortable” its strong finances and relatively low costs should get it through. 

I’ve no doubt about this. At a time when many companies are desperately trying to shore up their balance sheets, Boohoo’s looks solid as a rock. The firm had net cash of almost £241m at the end of February. This was £50m more than at the same point last year. 

Other attractions

Boohoo should emerge from the coronavirus crisis relatively unscathed but there are other many other attractions to the stock.

For one, Boohoo still has lots of room to grow. The recent acquisitions of MissPap, Karen Millen and Coast bode well for the future and should solidify its status as a multi-brand empire.

Second, Boo’s online-only business model gives it far more flexibility compared to the traditional bricks and mortar retailer. The automation of its distribution centres should also ensure it remains a highly efficient business.

Third, few companies appear to have a better grasp of the power of social media (and social proof) than Boohoo. Its ongoing strategy of hiring celebrities to advertise its clothes should continue to be a powerful ingredient of its rapid expansion.

All told, I’d have no issue adding this company to my ISA portfolio if I was looking for quality growth stocks to hold for years to come.

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Paul Summers has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended ASOS. The Motley Fool UK has recommended boohoo group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.