Shares of Skechers (NASDAQ: SKX) are down more than 20% today after the California shoe company reported earnings of 32 cents per share, compared with 40 cents in the prior year. On average, analysts were looking for 43 cents. Sales grew 21%, but operating expenses outpaced that growth with a 27% rise.

CFO Fred Schneider blamed the earnings shortfall on costs associated with the Cali Gear line and the roll-out of other new products and brands, but also expressed optimism about consumer acceptance of the new brands: "Our backlog, comp store sales and our July pre-line meetings with key accounts lead us to believe that our positive trend will continue. We see many opportunities in the domestic and international marketplaces to propel the SKECHERS brand and look forward to further growing our brands."

I wrote about a more interesting side to the Skechers story back in April. The company had taken the extremely unusual step of promoting its stock with television commercials. This was around the time that CEO Robert Greenberg was dumping shares like they were going out style just as L.A. Gear did back in the 1990s -- Greenberg also founded that company.

Anyone who bought Skechers stock on the advice of the company's TV commercials that I saw during a Red Sox game can't be too happy right now. Given that there was no disclosure in the ad that Greenberg was selling shares or that investment in stocks involves risk, I question the ethics of the AD; I've spoken with a securities law expert who went so far as to question the legality of the ad.

In the meantime, I would stay away from Skechers, in part because of its seemingly slimy management.