Recurve Capital, an investment management firm, showcased impressive performance in its second-quarter 2025 investor letter, highlighting a gross return of 31%. This significantly outperformed the S&P 500, which returned 10.6%, and the Nasdaq at 17.8%. The fund’s year-to-date figures stand at 14.8% gross and 12% net. Investors can download the full letter for deeper insights into the firm’s strategies and top holdings.
Among the companies discussed was RH (NYSE:RH), a key player in the home furnishings market. Despite a one-month return of 13.37%, RH has seen its stock decline by 39% over the past year, closing at $203.79 per share on October 2, 2025, with a market capitalization of $3.82 billion.
Recurve Capital’s Insights on RH
In the investor letter, Recurve Capital expressed frustration over the negative contributions from both RH and another company, Cogent. The firm acknowledged that while both companies faced valid challenges, it remains optimistic about RH’s future. “I nonetheless expect great results from these companies over the coming years and they should become meaningful positive contributors to performance,” the letter stated.
One significant factor impacting RH is the tariff situation. The company became a focal point for tariff discussions in April, particularly concerning its major sourcing regions, namely China and Vietnam. According to Recurve Capital, stable future tariff rates have alleviated some of the worst-case scenarios. The firm noted that RH has the potential to offset the impact of any new tariffs through a price increase of approximately 6-7%.
Recurve further highlighted that RH had already enacted high-single-digit to low-double-digit price increases across many of its stock-keeping units (SKUs) in April and May. This proactive approach is believed to mitigate the gross profit impact of tariffs, paving the way for RH to resume its trajectory of double-digit growth.
Market Position and Hedge Fund Interest
Despite its challenges, RH is not currently listed among the 30 Most Popular Stocks Among Hedge Funds. At the end of the second quarter, 49 hedge fund portfolios included RH, up from 46 the previous quarter. While Recurve Capital recognizes the investment risks associated with RH, it expresses a preference for certain artificial intelligence stocks that may offer higher returns in a shorter timeframe.
For those interested in alternative investment opportunities, Recurve’s report suggests there are AI stocks with potential upside exceeding 10,000%. Investors can read more about these promising AI stocks in their dedicated report.
In a separate analysis, the Carillon Eagle Mid Cap Growth Fund also evaluated RH, providing further insights into its market position. For additional perspectives from hedge funds, interested parties can visit Recurve Capital’s Q2 2025 investor letters page.
The outlook for RH remains cautiously optimistic, with hopes that the company will successfully navigate its current challenges and return to a path of sustainable growth.
