An E.l.f. store.

E.l.f. Beauty is getting out of the brick-and-mortar game after a tough fourth quarter and increasing pressure from the outside.

Shares of the Oakland, Calif.-based company plunged 15.4 percent to $8.02 in after-hours trading Tuesday following the firm’s announcement that it would close all of its 22 doors at a cost of between $23 million and $25 million.

The stores accounted for 5 percent of E.l.f.’s sales last year and the decision to close them will free up resources to focus on national retailers and digital channels.

The shift came as the beauty brand unveiled disappointing set of results, with fourth-quarter net sales slipping 4 percent to $78.6 million, while net income fell sharply to $9.7 million, or 20 cents per diluted share, compared with $21.5 million, or 44 cents, a year earlier.

Tarang Amin, E.l.f.’s chairman and chief executive officer, said “2018 was a challenging year” that saw net sales fall 1 percent to $267 million.

In the newsy earnings statement, E.l.f. also told investors that John Bailey, its president and chief financial officer, will be stepping down at the end of next month. The company is working on finding his replacement for the financial portion of his job. Bailey’s responsibilities as president will be absorbed by Amin and members of the executive team.

“John has been a terrific strategic partner to me and the entire executive team from inception through the IPO and to this stage in the company’s journey. I thank him for his service and wish him the very best as he returns to the investment world,” Amin said.

The store closures and executive departure come as E.l.f., which was founded in 2004, is feeling the pressure of an activist investor.

New York-based hedge fund Marathon Partners Equity Management, which has a near 9 percent stake in the publicly listed discount cosmetics company, last month wrote to the board, urging an overhaul of the firm’s operating strategy, corporate governance practices and executive compensation.

“It is unfortunate that we have not been able to find common ground with the E.l.f. team and board over the past six months,” wrote Mario Cibelli, head of Marathon Partners. “Senior leadership and the board have lost sight of the obligations and responsibilities that come with accepting new investors and public company ownership.”

The investor detailed that since E.l.f. went public in September 2016, its share price has fallen by 51 percent and stressed that the firm needed to optimize its expense structure and refocus on profitable growth in order to regain investor credibility and drive shareholder returns higher.

This was not the only heat it faced last month. It also emerged that the company had to pay close to $1 million after violating North Korean sanctions when importing eyelashes from China.

The problem was that those false eyelashes contained materials sourced from North Korea.

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