Is this stealing?

A friend of mine ordered a dress shirt from an online retailer. He said it matches perfectly with the suit he has to wear coming up. He's been looking a tthis particular shirt to see if it comes down in price. It didn't. So last week he finally pulled the trigger and paid almost $90 for the shirt including shipping. Shirt ordered Fri and it arrived today. When he opened it he noticed that it was the wrong size. We wears a 17.5 34/35 shirt but they sent him a 17.5 36/37 shirt. The sleeves are much too long. He calls the retailer and tells them they sent the wrong shirt. They tell him they would send him a return label to send it back and once they get the shirt back they would reship the right sized shirt. He told them that's not how it should work. He said that they should send him a return label and reprocess the order for the right sizer immediately. He questioned why they sent the wrong size anyway so the guy told him he would check with his warehouse and see what happened. A little while later they call him back and tell him that the warehouse didn't have his size in stock and they had no plans on ordering it again. He asked why they would send a bigger shirt in the first place. I guess they figured as long as he got a shirt he should be okay. He said what they should have done was when they pulled his order and noticed they didn't have his size in stock contact him and let him know and ask him what they should do. He said he would have told them to just refund the money and not ship anything.

He said he knows that based on FTC guidelines if a retailer ships you something you didn't order you are under no obligation to send it back. You could look at it as a free gift. AND, they should either reship the right size or refund his money since they don't have the correct size. He said he's not going to return the shirt and contact his bank that they sent the wrong item and dispute the charge so he can get his money back. Then take the shirt to an alteration shop he uses and see if they can just shorten the sleeves on it. Remove the cuff, shorten the sleeve, then reattach the cuff, which will most likely cost him that. He said that no other place has that shirt and given this retailer said they aren't planning on ordering it again he'll have to start searching again for a shirt.

Is that stealing or should the retailer have notified him before they shipped the wrong item so is he justified?