Shares of Hasbro rallied on Monday as the toy maker assured Wall Street that the worst of the effects of the Toys R Us liquidation would be over by this year’s holiday season.

The stock dipped almost 8% in pre-market trading but was up more than 3% at $85.36 later in the day. Hasbro reported a 16% decline in net revenue to $716.3 million for the first quarter, but company executives said the impact of the collapse of one of its largest retail customers would fall off in the second half of the year.

“We’re working aggressively around the world to put the impact of Toys R Us behind us,” CEO Brian Goldner said in an earnings call.

He expects that “the revenue impact will be most pronounced in the first half of the year with a lesser impact in the third and fourth quarters, including the important holiday season.”

Hasbro said major retailers plan to increase their toy sections to lure former Toys R Us shoppers. “Our global retailers view this as an opportunity in a key consumer category and are partnering with Hasbro to develop growth plans for our brands,” Goldner said in a news release.

Hasbro also lost $112.5 million, or 90 cents per share, in the first quarter compared to a profit of $68.6 million, or 54 cents per share, a year. Excluding items, earnings were 10 cents per share.

The results were well short of analysts’ estimates of earnings of 33 cents per share on revenue of $814 million. Hasbro had warned in February that residual effects from the bankruptcy of Toys R Us would weigh heavily on the brand for the first two quarters of 2018.

In the first quarter, the company took a hit across its toy portfolio, with sales of franchise brands, such as Nerf, Monopoly and My Little Pony, falling 19% and partner brands which include “Star Wars,” “Frozen” and “Marvel” merchandise, slumping 6%.

Hasbro’s gaming sales dropped 22% and emerging brands, which includes Baby Alive toys, fell 6%. “Our underlying financial strength is sound,” CFO Deborah Thomas said.

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