Beleaguered retailer JCPenney (JCP) is expected to post its prior quarter’s earnings after Wednesday’s close. And the question is: Will the upcoming earnings release confirm what so many current owners of JCP stock already believe … that the turnaround plan is truly getting traction?

If the pros are on target, the JCPenney earnings report will tell us the company lost 79 cents per share of JCP stock on $2.81 billion in sales.

Just for the record though, JCP has managed to top estimates in each of its past three quarters, and has grown the top line year-over-year in its past two quarters.

Yet, the numbers might not even be the key part of the JCPenney earnings report (and subsequent conference call) that shareholders should use to gauge the stock’s future potential.

JCPenney Earnings Outlook

To give credit where it’s due, while the retailer is expected to post yet another loss for last quarter, it’s on the road to recovery.

As was mentioned, analysts expect the company to report a loss of 79 cents per share of JCP stock, and a top line of $2.81 billion. Both of those figures are respectively better, however, than the year-ago numbers of a loss of $1.85 and a revenue figure of $2.78 billion.

Frankly, though, the market is apt to take greater interest in next quarter’s expected performance and any related guidance for that quarter.

Why? The obvious reason is one factor — the holiday shopping period is a critically important one for all retailers, including for JCPenney. For most names in the industry, the last two months of the year are the period during which they actually become profitable for the year.

That’s not the only reason Q4 is going to be a significant one for owners of JCP stock, however. The current quarter’s results are going to be well-watched primarily because the market expects JCPenney to swing back to a profit. As of the latest look, analysts collectively believe the retailer will turn a profit of 14 cents per share. Any downward shift of that expectation could be trouble, while any upward shift could be a bullish catalyst.

In the same vein, much of what little strength JCP stock has exhibited of late is based on optimism regarding the longer-term future. Analysts expect the per-share bottom line loss of $2.55 this year to improve to a loss of only $1.34 next year. Meanwhile, revenue is expected to grow from $12.29 billion this year to $12.79 billion in 2015.

Given those numbers, there may be little to no wiggle from from investors.

Bottom Line for JCP Stock

With all of that being said, what could really make or break JCP stock is something unrelated to the numbers. Namely, the post-earnings response might hinge entirely on how confident investors feel with a new CEO poised to take the helm.

CEO-elect Marvin Ellison has been welcomed with as much concern as enthusiasm from the market. He has retail experience, coming directly from the executive ranks of Home Depot (HD) where he’s proven himself more than capable as an operations overseer. He’s also got customer service chops, and few dispute he’ll do well for JCP stock owners on those fronts.

Ellison lacks experience in soft lines/clothing, though, which is JCPenney’s bread and butter. That lack of experience doesn’t preclude Ellison from driving growth; he can hire experienced soft lines people. But investors are and will be concerned unless they’re comforted by something stated with the JCPenney earnings call Wednesday.

To be clear, Marvin Ellison might not even participate in the call. That’s not the point. Current CEO Mike Ullman can calm the worries simply by saying the right things in the right way regarding the transition and Ellison’s aptitude.

The question is, will he?

From a more logistical point of view, shareholders may also want to heed what the company has to say regarding its significant debt. As of the latest look, the company is sitting on $5.36 billion in long-term obligations … a liability that’s been in an uptrend of late. Though never a dramatic burden, servicing that debt has become a nagging toll, and with JCP sporting a debt-to-equity ratio of 2.06, investors are understandably nervous.

As of this writing, James Brumley did not hold a position in any of the aforementioned securities.