Ethan Allen Interiors Inc. (NYSE: ETD) has mailed a letter to shareholders ahead of its Annual Meeting of Stockholders scheduled for November 4, 2026, urging support for its five board nominees and opposing a rival slate put forward by an activist investor group identified as DGB.

According to the letter, based on a press release from the company, the board contends that DGB has not provided a detailed operating plan or capital allocation strategy to support its claim that it can triple shareholder value within 24 to 36 months. Ethan Allen states that its own plan includes a projected 15% increase in marketing spend in fiscal 2027, following a 10% increase in fiscal 2026.

The company reported $52.5 million in operating cash flow in fiscal 2026, ending the period with $187.5 million in cash and investments and no debt. Ethan Allen also states it has maintained gross margins above 59% for five consecutive years.

The board cited an ongoing CEO search as a key reason to retain its current nominees, noting that independent directors are working with a search firm and have committed to naming a new CEO by June 30, 2027. The board argues that replacing directors during this transition would transfer oversight of both the business and the CEO search to individuals lacking access to internal succession work.

Ethan Allen also questioned the records of DGB's nominees, pointing to declining revenue at Grove Collaborative, declining shareholder returns at Cable One, both metrics at Wayfair, and a financial restatement and SEC action at VeriFone during periods when the nominees served at those companies. The company acknowledged these results do not establish individual causation.

The company's five nominees are M. Farooq Kathwari, David M. Sable, Tara I. Stacom, Maria Eugenia Casar, and Cynthia Ekberg Tsai. Shareholders of record as of September 11, 2026, are eligible to vote at the November 4 meeting.