NEW YORK (TheStreet) -- Investors want to know one thing when J.C. Penney (JCP) reports third-quarter earnings on Wednesday: Was this the quarter when the company finally had some real turnaround?

The Plano, Texas-based retailer is expected to post a loss of $1.77 a share for the third quarter, according to Thomson Reuters, nearly double the 93-cent loss of a year earlier, but narrower than the $2.16 a share adjusted loss J.C. Penney reported for the July-ended quarter.

Revenue is expected to fall 5% to $2.79 billion. And while no retailer ever wants to see declining quarterly sales, it's far better than the 26% sales drop in the third quarter of 2012 and the 12% decline in the second quarter.

J.C. Penney has been publicly noting improved sales within its business -- last month it reported the first positive monthly comps in nearly two years. But the question is how much of that has come at a price? In other words, has the company been executing significant promotions in order to get shoppers in the door and even online?

"With shares already pricing in improved sales momentum, we remain fixated on what merchandise margin levels have been that has driven the improvement and the strategy of balancing promotion and sales in (the fourth quarter)," Deutsche Bank analyst Paul Trussell wrote in a Nov. 18 note. "We believe JCP will continue to recover lost top-line and margin, but we remain cautious on the pace."

Deutsche Bank has a "hold" rating on J.C. Penney.

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