UPDATE 1-Callaway sees 1st-qtr profit, sales below Street

*Callaway forecasts Q1 profit, sales below Street

*Says economic conditions worse than anticipated

*Shift to lower-priced products hurting margins

LOS ANGELES, April 16 (Reuters) - Callaway Golf Co (ELY.N) on Thursday forecast weaker-than-expected, first-quarter revenue and profit as consumers put off buying golf equipment, prompting retailers to keep inventories slim.

The golf equipment maker known, for the Big Bertha line of clubs, said it expects earnings in the range of 10 cents to 12 cents a share. It said sales would be about $272 million, a drop of 26 percent from the previous year.

Analysts were expecting the Carlsbad, California-based company to post a profit of 42 cents a share on sales of $317.3 million, according to analysts polled by Reuters Estimates.

"Global economic conditions have proven to be more severe than initially anticipated," Chief Executive George Fellows said in a statement, adding that a shift by consumers to lower-priced products was hurting the company's profit margins.

In January, Callaway posted a fourth-quarter loss of $3.2 million that was in line with analysts' expectations, but warned that fluctuations in foreign currency would have a "significant adverse impact" on its international results in 2009. It declined to provide a forecast for its 2009 results at the time

On Thursday, the company said industry-wide sales this year would decline by about 15 percent to 20 percent from 2008. Callaway said its annual sales are expected to decrease less than that, but did not give specifics. (Reporting by Ben Klayman in Chicago and Nichola Groom in Los Angeles, editing by Leslie Gevirtz)