A movie needs to bring in twice its budget to be profitable[1] is the common rule of thumb. The budget doesn't include things like marketing, and the fact that the box office is shared with the theatre owner.

So in your example, it potentially lost money for Disney. The wikipedia article almost says as much [2]

"Although it underperformed at the box office ..."

[1] https://gizmodo.com/how-much-money-does-a-movie-need-to-make...

[2] https://en.wikipedia.org/wiki/Encanto

Was Encanto the one they dumped on Disney+ real quick? It might have strongly affected popularity of the song (which is catchy as all hell, and can stand with Let It Go) since that was perhaps the peak.

None of the recent Disney animated movies have been “direct to DVD” terrible but they haven’t been exceptionally better than everything else.

It used to be that everyone basically considered Disney (and upstart Pixar) to be at the top of the class, and even extremely successful movies like Despicable Me to be a tier or two below.