Starbucks Corp. SBUX, -1.47% said it will acquire Bay Bread LLC and its La Boulange Bakery brand from investment group Next World Group for $100 million in cash, a move aimed at strengthening the coffee giant's core U.S. retail business and expanding its food offerings.

The acquisition is expected to dilute earnings by 2 cents a share in the second half of the year.

Starbucks said it plans to make La Boulange products available in Starbucks retail stores in the U.S. over time and also said it would hire French baker Pascal Rigo.

Starbucks, which noted that its food portfolio is an important part of its core business and represents a significant growth opportunity, said the acquisition will also accelerate the expansion of Starbucks's retail footprint in key U.S. cities, the company said.

La Boulange bakery operates 19 retail locations in the San Francisco Bay area and also sells its products in several upscale restaurants, hotels and specialty grocery stores.

"After more than 40 years, we will be able to say that we are bakers too," said Starbucks Chairman and Chief Executive Howard Schultz.

In April, Starbucks reported its fiscal second-quarter earnings rose 19%, though economic troubles in Europe are weighing on its business there. U.S. cafes are still the biggest contributer to Starbucks's profit. In the latest quarter, same-store sales were up 8% in the company's Americas stronghold, which encompasses the U.S., Canada and Latin America.

Shares were off 2.6% at $52.55 after hours. Through the close, the stock has gained 53% over the past 12 months.