SAN FRANCISCO — After a short burst of success, Gap Inc. is once again mired in a deepening sales slump with little reason for optimism — an uncomfortable position similar to the distress that prompted the clothing retailer to shake up its leadership nearly 3 1/2 years ago.

Now, Gap CEO Paul Pressler — the man hired to lead a turnaround — finds himself on the hot seat as he tries to appease investors disillusioned with the dismal earnings and outlook that the company released after the close of trading yesterday.

Wall Street punished Gap for the letdown, shrugging off the news that the company would raise its annual dividend by 78 percent to 32 cents per share. Gap's shares fell 4 cents to close at $19.10 on the New York Stock Exchange, then shed $1.09, or 5.7 percent, in extended trading.

In its latest quarter ended Jan. 28, San Francisco-based Gap earned $337 million, or 39 cents per share. That compared with net income of $378 million, or 40 cents per share, in the previous year.

Sales totaled $4.8 billion, a 2 percent decline from $4.9 billion in the previous year.