Campbell Soup (NYSE: CPB) is selling its Godiva chocolate business since too few people want to eat the sweet stuff while they are having a hot bowl of chicken noodle soup. But Starbucks (NASDAQ: SBUX) may think that chocolate and coffee go together.
The Wall Street Journal reports, however, that "should Starbucks indulge in Godiva, which Campbell put up for sale in August, it would be a departure from its modus operandi." Wall Street experts put the price of Godiva at around $800 million.
If Starbucks buys Godiva, it would be a huge mistake. The coffee retailer's shares are near a 52-week low, trading at under $26. They have a 52-week high of more than $40.
The doubts about Starbucks center around its long-term goal of having 40,000 stores worldwide. Investors are concerned that current same-store sales may be too weak to support that kind of expansion. If Starbucks goes into a second business without fixing its first, the company's stock could take another hit.
Godiva may seem like a sweet deal, but all it would do is take Starbucks' eyes off the ball.
Douglas A. McIntyre is an editor at 247wallst.com.
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